"I consider that the nature of the work which a firm of accountants undertakes in the provision of litigation support services requires the court to exercise the same jurisdiction to intervene on behalf of a former client of the firm as it exercises in the case of a solicitor. The basis of that jurisdiction is to be found in the principles which apply to all forms of employment where the relationship between the client and the person with whom he does business is a confidential one. A solicitor is under a duty not to communicate to others any information in his possession which is confidential to the former client. But the duty extends well beyond that of refraining from deliberate disclosure. It is the solicitor's duty to ensure that the former client is not put at risk that confidential information which the solicitor has obtained from that relationship may be used against him in any circumstances. Particular care is needed if the solicitor agrees to act for a new client who has, or who may have, an interest which is in conflict with that of the former client. In that situation the former client is entitled to the protection of the court if he can show that his solicitor was in receipt of confidential information which is relevant to a matter for which the solicitor is acting, against the former client's interest, for a new client. He is entitled to insist that measures be taken by the solicitor which will ensure that he is not exposed to the risk of careless, inadvertent or negligent disclosure of the information to the new client by the solicitor, his partners in the firm, its employees or anyone else for whose acts the solicitor is responsible. As for the circumstances in which the court will intervene by granting an injunction, it will not intervene if it is satisfied that there is no risk of disclosure. But if it is not so satisfied, it should bear in mind that the choice as to whether to accept instructions from the new client rests with the solicitor and that disclosure may result in substantial damage to the former client for which he may find it impossible to obtain adequate redress from the solicitor. It may be very difficult, after the event, to prove how and when the information got out, by whom and to whom it was communicated and with what consequences. In that situation everything is likely to depend on the measures which are in place to ensure that there is no risk that the information will be disclosed. If the court is not satisfied that the measures will protect the former client against the risk, the proper course will be for it to grant an injunction."
"On8 July 1998 the BIA formally instructed KPMG to provide assistance in connection with the investigation of the withdrawal of assets from the BIA by means of the special transfers. It was about this time that it became clear that the assignment was at least in part adverse to Prince Jefri's interests. The work was covered by an engagement letter dated13 August 1998 . This required KPMG to assist in establishing the extent of the withdrawal of funds, the use made of the withdrawn funds, the assets acquired with them, the present location of such assets, and the identity of the persons or entities now controlling them. KPMG were instructed to work with the BIA's legal advisers in obtaining evidence and where appropriate to trace, secure and recover assets belonging to the BIA both in Brunei and overseas. This further assignment was given the code name Project Gemma and Mr Harrison was appointed as the lead partner. He had never been in receipt of any confidential information relating to Prince Jefri's business, financial or personal affairs. Although he was to head the project, this was clearly not simply an extension of the audit; it would involve the tracing and recovery of assets and might well lead to civil and even criminal proceedings against Prince Jefri. It would be undertaken by members of the forensic accounting department and would be likely to involve them in the provision of litigation support services. It must have been obvious, and indeed is common ground, that some at least of the confidential information obtained by or provided to KPMG in the course of Project Lucy was or might be relevant to Project Gemma. It must also have been obvious, and again is common ground, that in relation to Project Gemma the interests of the BIA were adverse to those of Prince Jefri. KPMG did not inform Prince Jefri of their new assignment, nor did they seek his consent to their acceptance of the project. KPMG employed some 50 people on Project Gemma, 11 of whom had previously been engaged on work for Prince Jefri. Most of them worked in Brunei but never more than 15 at a time. KPMG contends that none of the 11 was in possession of information confidential to Prince Jefri. Over 7,500 hours were spent on work for the BIA between 18 June and 15 September when Pumfrey J granted an injunction to restrain KPMG from continuing with work on Project Gemma."
"The Chinese walls which feature in the present case, however, were established ad hoc and were erected within a single department. When the number of personnel involved is taken into account, together with the fact that the teams engaged on Project Lucy and Project Gemma each had a rotating membership, involving far more personnel than were working on the project at any one time, so that individuals may have joined from and returned to other projects, the difficulty of enforcing confidentiality or preventing the unwitting disclosure of information is very great. It is one thing, for example, to separate the insolvency, audit, taxation and forensic departments from one another and erect Chinese walls between them. Such departments often work from different offices and there may be relatively little movement of personnel between them. But it is quite another to attempt to place an information barrier between members all of whom are drawn from the same department and have been accustomed to work with each other. I would expect this to be particularly difficult where the department concerned is engaged in the provision of litigation support services, and there is evidence to confirm this. Forensic accountancy is said to be an area in which new and unusual problems frequently arise and partners and managers are accustomed to share information and expertise. Furthermore, there is evidence that physical segregation is not necessarily adequate, especially where it is erected within a single department. In my opinion an effective Chinese wall needs to be an established part of the organisational structure of the firm, not created ad hoc and dependent on the acceptance of evidence sworn for the purpose by members of staff engaged on the relevant work."
"I do not accept Mr Malek's suggestion that Mr Pollock must give examples of instances where a harmful inadvertent leak of information could take place. Not only do the plaintiffs not know how many PKF personnel are to have been involved in one way or another with the events leading up to the Syndicate's actions or have since become involved in defending them, but they do not know where they are currently located, where they will be located if the merger goes ahead (assuming it does so), with whom they will be working and what other tasks they are engaged on which could give rise to contact with members of the Attwood team. The fact, as confirmed in the witness box ... that it is proposed that the RR and PKF forensic accountancy departments should merge, cannot reassure the plaintiffs. Furthermore, even if all these factors were known to the plaintiffs, it would still be unrealistic to ask Mr Pollock to describe an example of a damaging and inadvertent leak. It is impossible to tell in advance now mistakes might be made. The approach to be adopted by the court is to ensure that even if there are mistakes, no additional risk of damage is inflicted on the former client. Such damaging mistakes can occur when potential disclosers and disclosees are in regular and working contact with one another. The fact that there are fewer potential disclosers here than in the Prince Jefri case may alter the scale of the risk, but does not mean that it is fanciful."
"That brings me, finally, to the question whether the respondent has discharged its burden in this case. It will be apparent from what I have said in the earlier part of these reasons that the respondent proposes to do so by means of the giving of undertakings and, in effect, the erection of a `Chinese wall'. Walls or information barriers of that kind have not often found favour with the courts. In D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118, at 122-123, Bryson J said: `I would think that the court would not usually undertake attempts to build walls around information in the office of a partnership, even a very large partnership, by accepting undertakings or imposing injunctions as to who should be concerned in the conduct of litigation or as to whether communication should be made among partners or their employees. The new client would have to join in such an arrangement and give up his right to the information held by such parties and staff as held it. Enforcement by the court will be extremely difficult and it is not realistic to place reliance on such arrangements in relation to people with opportunities for daily contact over long periods, as wordless communication can take place inadvertently and without explicit expression, by attitudes, facial expression or even by avoiding people one is accustomed to see, even by people who sincerely intend to conform to control.' Those comments have many times since been quoted with approval: ..."
"Koch have therefore been able to show a strong case with regard to the confidential information which Ms Peaston has. They have identified with particularity information which on its face is likely to be highly material to the future conduct of the `Atlas M' matter, both information relevant to any negotiations to settle the dispute and information about how any hearing might be conducted by Koch."
"1. Mr Charles Weller and Ms Jane Peaston each undertake: (a)To keep confidential to themselves and not to disclose to any other person, any confidential or privileged information acquired by them relating to the Atlas M arbitration or the affairs of the Claimants other than under compulsion of law or for the purposes of legal advice in connection with their position; (b)Not to discuss or permit to be discussed in their presence the Atlas M arbitration or the affairs of the Claimants other than under compulsion of law or for the purposes of legal advice in connection with their position; (c)Not to participate in or vote at any meeting at Richards Butler which directly or indirectly concerns the Atlas M arbitration; (d)Not to communicate with George Arghyrakis or Michael Harakis save that Charles Weller may attend partners meetings and meetings of the Shipping Group. 2. Mr Charles Weller and Ms Jane Peaston each confirm that they possess no documents whatsoever relating to the Atlas M arbitration or the affairs of the Claimants save those disclosed in the Claimants' action against Richards Butler and those generated in that action since it was commenced on3 September 2001 . 3. Mr George Arghyrakis and Mr Michael Harakis each undertake: (a)Not to discuss the Atlas M arbitration with, or permit it to be discussed in the presence of, any other fee earners at Richards Butler, other than under compulsion of law or for the purpose of legal advice regarding the action taken by the Claimants against Richards Butler; (b)As regards Ms Jane Peaston and Mr Charles Weller not to discuss the Atlas M arbitration or the affairs of the Claimants with either of them for any purposes whatsoever. 4. Richards Butler undertake: (a) Not to do anything to prevent compliance by Mr Weller, Ms Peaston, Mr Arghyrakis and Mr Harakis with their undertakings; (b) To ensure that the Atlas M arbitration and the affairs of the Claimants are not raised directly or indirectly at any partner(s) meetings or any meeting of the Shipping Group at Richards Butler save solely to mention the fact that the existence of the Atlas M arbitration gave rise to the action by the Claimants against Richards Butler."
"33. Mr Talbot has advanced powerful arguments that if the undertakings offered by Richards Butler are given, Koch's confidential information is safe from disclosure. He relies upon the evidence of Ms Peaston and other solicitors at Richards Butler, Messrs Arghyrakis, Harakis, Hunt and Weller. He is entitled to do so: there is no challenge to their credibility. 34. First, it is only the risk of inadvertent disclosure which concerns Koch. It is common ground that Koch can rely upon Ms Peaston's integrity and standards to ensure that there is no deliberate breach of confidentiality. Furthermore, Ms Peaston's evidence makes it clear that she fully understands her duties of confidentiality to former clients. She had them well in mind before any challenge arose to Richards Butler acting against Koch or Mack Multiples. She explains in her evidence that from the time that she joined Richards Butler, she has been alert to the danger of accidentally contravening her duty; that she has been `acutely aware of the need to avoid a situation where there was any chance that confidential information about former clients might slip through'. She is able to say that `there certainly has not been a single occasion when it is possible that [information relating to the "
"43. In these circumstances I certainly do not consider that there is much danger of Koch's information being disclosed, and in my judgment the risk could properly be characterised as slight. However, I have to consider whether the risk is so unreal that Koch should not be protected against it. I must do so bearing in mind Lord Millett's observation (at page 237H) that, the world being as it is, `unless special measures are taken, information moves within a firm'. I cannot confine myself to considering the danger of information being passed by Ms Peaston directly to the Atlas M case-handlers, but must also be concerned about the risk of information indirectly reaching them. Moreover, I must consider the risk of disclosure occurring at any time while the arbitration continues; that is to say, a period which could be as long as two or three years. Ms Peaston is working in the same Group as those handling the arbitration, and Richards Butler contemplate that she should work in the same building, albeit not on the same floor, as them. Despite all the reassurances which Richards Butler offer, it remains the case that, if she worked at Beaufort House, Ms Peaston would have regular professional contact with others in the Shipping Group three days a week. 44. In Young & Ors v Rhodes & Frank Atwood [1999] Lloyd's Rep PN 641 at page 651 Mr Justice Laddie said, `It is impossible to tell in advance how mistakes might be made. The approach to be adopted by the Court is to ensure that even if there are mistakes, no additional risk of damage is inflicted on the former client. Such damaging mistakes can occur when potential disclosers are in regular and working contact with one another. The fact that there are fewer disclosers here than in the Prince Jefri case may `alter the scale of the risk, but it does not mean that it is fanciful'. 45. Adopting the approach described by Mr Justice Laddie, I cannot, despite the undertakings offered by Richards Butler, dismiss as fanciful the residual risk of some relevant information being let slip by Ms Peaston through inadvertence and reaching the Ariadne case-handlers. Richards Butler have not discharged the burden of showing that there is no real risk of this. I add that I would have considered the risk would be so small as to be fanciful if Richards Butler offered an undertaking that Ms Peaston would work from home or from somewhere other than Beaufort House."
"... wordless communication can take place inadvertently and without explicit expression, by attitudes, facial expression or even by avoiding people one is accustomed to see, even by people who sincerely intend to conform to control."
"It is of overriding importance to the proper administration of justice that a client should be able to have complete confidence that what he tells his lawyer will remain secret. This is a matter of perception as well as substance. It is of the highest importance to the administration of justice that a solicitor or other person in possession of confidential and privileged information should not act in any way that might appear to put that information at risk by coming into the hands of someone with an adverse interest."