What Is Client Confidentiality?

Lainie Petersen

The term “client confidentiality” is used in business, professional, and even religious communities to describe policies that prohibit disclosing client information to other parties without the client’s permission or a clear ethical or legal obligation to do so. In many jurisdictions, client confidentiality for law clients, medical patients, and consumers of mental health services is strictly regulated by a combination of both law and industry standards. In addition, many businesses and freelance consultants regularly enter into confidentiality agreements with client and customers, agreeing to not share trade secrets, plans, or other pertinent information with others.

Medical patients have a presumption of confidentiality.
Medical patients have a presumption of confidentiality.

Some of the best-known restrictions on client confidentiality are those imposed on members of the legal profession. In many countries, including the United States, communications between an attorney and his client are privileged, which means that the attorney cannot disclose information that the client has revealed to him without permission from the client. In addition, disclosures made to one’s own attorney generally can’t be used against the client in court.

Laws regarding medical client confidentiality can be very strict. In the United States, for example, the federal Health Insurance Portability and Accountability Act (HIPAA) sharply restricts how medical information can be disclosed to anyone other than the patient to whom the information pertains. These laws also govern how medical information can be stored and transmitted and even restrict the information that can be provided to collection agencies that work on behalf of medical providers. Mental health providers, including those who work with substance abusers or sexual assault victims, are likewise often required to keep confidential anything that clients disclose to them during treatment.

In the business world, it is not unusual for business clients to share sensitive information with other businesses and consultants. As this information could be used to undermine the client’s ability to continue doing business, many require vendors and freelance consultants to sign non-disclosure contracts in which the consultant or vendor agrees to pay damages to the client if confidential information is disclosed to another party. These non-disclosure agreements can vary in scope and are often subject to negotiation, as some consultants and vendors may work for competing businesses.

Exceptions to client confidentiality laws and policies also exist, with the intent of protecting the welfare of both the general public as well as specific individuals. Some of the best-known exceptions are those allowed to mental health and medical professionals, which allow the professional to disclose information to the proper authorities if a client or patient is believed to be a danger to himself or others. Other times in which violating client confidentiality may be permissible or even required by law is when sharing information would protect the public from significant harm. An example of this latter exception would be a situation in which a client reveals information about knowledge of the dangerous activities of another person.

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