High Court refuses to restrain city firm from acting against former client

Solicitors are under a duty not to disclose any information in their possession which is confidential to a former client. Since the leading case of Prince Jefri Bolkiah v KPMG [1999] 2 AC 222, the judiciary has typically approached such potential former client conflict cases with cynicism as to the effectiveness of measures put in place to protect the former client’s information, and such cases are notoriously difficult for solicitors to win. However, the recent decision in The Bank of London Group Ltd v Simmons & Simmons LLP [2022] EWHC 2617 (Ch) shows that former clients do not have an unfettered right to prevent solicitors from acting against them.

Background

Simmons & Simmons were instructed by the Bank of London and The Middle East Plc (BLME) to act for it in respect of a passing-off claim against The Bank of London Group Ltd (TBOL). Simmons & Simmons had previously done some regulatory work for TBOL. TBOL sought an injunction to restrain Simmons & Simmons from acting for BLME and from divulging any confidential information received from TBOL.

Decision

Applying Bolkiah, Stuart Issacs KC, sitting as a Deputy Judge of the High Court, found that Simmons & Simmons was not in possession of relevant confidential information, and that in any event, there was no real risk of disclosure.

With regard to the first limb (relevant confidential information), the judge recognised that information provided to solicitors in the context of a solicitor-client relationship is required to be treated as confidential. However, in the context of these types of claims, relevance is key. The judge found that TBOL had failed to sufficiently identify the confidential information said to be relevant to the passing-off claim. Citing Lightman J in Re a Firm of Solicitors [1997] Ch 1, the judge noted that identification of the nature, length and subject matter of the original retainer were pertinent considerations when assessing relevance. In this case, Simmons & Simmons had only done a limited amount of regulatory work for TBOL over a short period, for which it had only charged £5,435.

As to the second limb, the judge found that there was no real risk of disclosure. He accepted that the starting point is that, unless special measures are taken, information moves within a firm: Bolkiah. However, he found that “any criticism of the defendant’s approach to the situation cannot be sustained.” In particular, he found that an effective information barrier was established as soon as practicable, and that considerable weight should be attached to the statements given by the solicitors at Simmons & Simmons as to the measures taken to protect TBOL’s confidential information.

Lessons learned

Bolkiah tells us that the burden of proof on the former client in showing that the solicitors are in possession of relevant confidential information is “not a heavy one”. However, this recent judgment emphasises that it is not enough for a former client to simply assert that information provided to the solicitor is relevant. Rather, it must particularise the information said to be relevant, and satisfy the court that it is indeed relevant to the claim now being brought against it. In this case, the limited scope of work carried out for the former client contributed to the judge’s finding that the information in Simmons & Simmons’ possession was not relevant to the passing-off claim.

Likewise, while Bolkiah tells us that the solicitors bear a “heavy burden” in showing that there is no real risk of disclosure, the recent judgment shows that this burden is not insurmountable. Information barriers have become much more sophisticated and commonplace in the 23 years since Bolkiah was decided. Furthermore, this case emphasises the importance of being able to produce compelling and cogent evidence from the solicitors involved in order to satisfy the court that there is no real risk of disclosure.

Ed Foss and Amy Ramsay of CMS’s Insurance and Reinsurance Group acted for Simmons & Simmons, instructing Charles Hollander KC of Brick Court Chambers. The judgment is here.