Today we started the 4th chapter of Sefer Chofetz Chaim which discusses speaking lashon hara about deeds a person or his family did of prohibition between man and Hashem, for example breaking Shabbos or not eating kosher. This means one cannot speak out someone or about that person's family that they use to not keep kosher or the like even if they have totally changed there ways and everyone knows that, and even if it is behind his back because if he would be there it is very likely he would be embarrassed if it was brought up.
It would seem though, that if he was there and he himself brought up the subject about his past, talking about old times and the mistakes he made or just recollecting about good times with his friend at the movies or parties for instance, then it would be permissible for others to continue the conversation and reminisce assuming it won’t damage his reputation or him physically or monetarily and that the person continuing the conversation doesn’t have intent to denigrate him.
The Chofetz Chaim brought an illustration about how just the fact a person would be embarrassed is reason not to mention his past misdeeds even if it won’t harm him in any way, from a Gemara in Bava Metzia 59a where King David said that anyone who mentions his sin that he did with Batsheva (which was not as severe as it looked, he did complete repentance, and everyone accepted him as king at that time) would still be worse than the sin itself because if anyone would cut him no blood would be spilled, I.e. he is so embarrassed over what happened. All the more so if it will monetarily, or physically harm someone, for example he won’t be able to find a job because of what you said, or even just to scare him is not permissible.
If done with malicious intent the Rabbeinu Yona says in Shaarei Teshuva 214 that these type of people the Shechina, Divine Presence, does not rest among them.
The Chofetz Chaim also illustrates how by just not watching what you say one can create severe ramifications. There is a Gemara in Shabbos 33b which relates that Yehuda Ben Geirim was privy to a conversation the judges in the Sanhedrin about Rome. Rebbe Yehuda was praising Rome for all the useful roads, bridges, bathhouses etc. that were made which could be used by the Jews to serve Hashem better. Rebbe Shimon ben Yochai said they did it all for there own pleasure and sinful ways. Yehuda Ben Geirim went back home and in innocent conversation discussed what he heard in the Sanhedrin that day. Somehow word got out to the Roman government of what Rebbe Shimon Ben Yochai said which had grave results.
However the Chofetz Chaim did say that one can confide in a righteous person who is known to be modest and private that you can trust won’t say anything else to anyone and know he will not come to judgement about that person being talked about and he is not trying to insult the guy, then you can tell that rabbi about someone, for example who is not eating kosher, or keeping Shabbos appropriately, for maybe he will be able to help him fix his ways. Another application of one you can trust would be a psychologist or the like who is paid to listen to problems and to keep his mouth shut.