“As pointed out by Mr Wyand, ABC’s IP department in Leeds is relatively small when one looks at the size of the relevant departments in the three very recently reported cases to which I have referred. However, it seems to me that, while one can see an argument for saying that makes it more likely that information will cross a barrier, I believe that it is unrealistic not to conclude that the fewer people are subject to the barrier the less likely the barrier is to be crossed. It appears to me to be self-evidently easier to police a system involving fewer people rather than more people. Statistically, the risk of someone doing something wrong by accident is greater the more people may be subject to the possibility of accident.”
“The following circumstances may make it difficult to implement effective safeguards and information barriers: (a) you are a small firm; (b) the physical structure or layout of the firm means that it will be difficult to preserve confidentiality; or (c) the clients are not sophisticated users of legal services.”
“It is unsurprising in the circumstances that the guidance notes to Chapter 4 emphasise the difficulty of implementing effective safeguards and information barriers if the firm is small; if the physical structure or layout of the firm means that it will be difficult to preserve confidentiality; or if the clients are not sophisticated users of legal services. While this is not a ‘City firm only’ rule or ‘20+ partner only’ rule, in reality it is unlikely that any small firm would be able to achieve the necessary protections and effective barriers.”
“[24] The position may well have been much the same even without an express confidentiality clause. The very nature of a mediation requires that, in principle, it be conducted on a confidential basis, with the parties encouraged to ‘lay bare their souls’ for the purpose of facilitating a conciliation and resolution of the dispute. Understandably, the parties will be cautious about doing so if what they do and say can be used against them for a different purpose by lawyers who happen to be participating.”
“[26] … Certainly a party seeking the exclusion of the other side’s legal advisor must first show that there is an appearance of risk, going beyond the remote or merely fanciful, of conscious or unconscious use or disclosure by the lawyer of something relevant to the current dispute of which he lawyer gained knowledge as a result of participation in an earlier mediation But if that threshold is reached, it is then for the lawyer to demonstrate that in fact no such risk exists or that, if it does, no damage, other then de minimis, could possibly result from use or disclosure. [27] The initial threshold is appropriately a low one because of the nature of the obligation of confidentiality which the lawyers accepted in their written agreements when undertaking the mediations. Beyond pointing to the general circumstances of the particular case – here the apparently overlapping claims arising out of a similar factual background of purchases of machinery and equipment on the basis, as alleged, of representations of CHHF – it should not be required of a party seeking to ensure the protection of its confidential information that it must spell out particular matters of concern. To ask it to do so might be to ask it to reveal the very matter it is seeking to keep to itself. Moreover, it may not be able to be sure exactly what the lawyers may have learned from their observations during the mediation process. The disadvantage it is seeking to prevent may be as subtle as something which may have been observed by the lawyers in the body language of one of its representative. Even an observation of that kind might give the lawyers a tactical advantage in deciding how to pursue the claim of their other client.”
“[22] The passage in the speech of Lord Millett in Prince Jefri Bolkiah v KPMG[1999] 2 AC 22 2relied upon by Mr Glick cannot be applied to a solicitor who has obtained information from an opponent by the process of disclosure. It is usually enough to rely upon the recognition by a solicitor of the duty not to make any ulterior use of information obtained by disclosure. The Adex International case (unreported)17 November 2000 was correctly decided, but it is a rare example of a situation where a solicitor was precluded from acting for a different claimant against the same defendant in respect of a similar claim as a result of confidential information obtained about the defendant in the earlier proceedings. The approach of the Court of Appeal of New Zealand in the Carter Holt Harvey Forests case[2001] 3 NZLR 343 was adopted in a case involving an express confidentiality agreement in mediation. It is not an approach that can be generally applied whenever information has been obtained by lawyers in a case as a result of disclosure.”
“[39] … I accept Mr Smith’s submission that a distinction is to be made between two classes of case. The first class consists of cases in which there has been a previous relationship of solicitor and client in which confidential or privileged information is acquired by the solicitor and that solicitor now acts or wishes to act for another person who is in dispute with the former client. The second class consists of cases where, without any such previous relationship, a solicitor becomes possessed of confidential or privileged information belonging to the other party to the dispute. The distinction operates at the level of remedy: see Solicitors, Re[1997] Ch. 1 ; [1995] 3 All E.R.482at p.492 of the latter report. In that case, Lightman J. stated that in a ‘previous relationship’ case, in the ordinary course a court will grant an injunction restraining the solicitor acting, as it did in the earlier case with the same name; Solicitors (A Firm), Re [1992] Q.B. 959. In cases where there has been no previous solicitor-client relationship, however, ‘in the ordinary course the court will merely grant an injunction restraining the solicitor making use of that information’, as it did in English and American Insurance Co Ltd v Herbert Smith[1998] F.S.R. 232and Goddard v Nationwide Building Society[1987] Q.B. 670.”
“[15] It is clear that if Bolkiahprinciples apply there is no question of any balancing, see per Lord Millett at p.237B. The interests of the former client prevail. But if interlocutory injunction principles apply, then the potential harm to the defendant if an injunction is ‘wrongly’ granted may potentially come into play. [16] In the end this point did not matter, for even on interlocutory injunction applications (and it should not be forgotten that Bolkiahitself was an interlocutory injunction case) the balance of convenience matters little if the reality is that the decision will determine the matter finally. So I say no more about ‘balancing’.”
“I would also reject the approach taken by the New Zealand Court of Appeal in Russell McVeagh McKenzie Bartleet & Co. v. Tower Corporation,25 August 1998 and adopted by the Court of Appeal in the present case. In my opinion the balancing exercise which was undertaken was inappropriate. This is not because the considerations which were thought to militate against the granting of injunctive relief were irrelevant: far from it. It is clearly relevant that Prince Jefri retained KPMG in the knowledge that they were the B.I.A.'s auditors, and that the B.I.A. would be put to inconvenience and expense if his retainer were to prevent it from employing KPMG's services in future. But such considerations are relevant to a different question: whether in the circumstances Prince Jefri must be taken to have consented to KPMG's undertaking the further assignment for the B.I.A. For the reasons I have given, he must be taken to have consented to the acceptance by KPMG of the instructions given to Mr. Harrison in June, for these were a natural extension of the audit. But Project Gemma was a very different matter. Absent such consent, the considerations which the Court of Appeal took into account cannot in my opinion affect the nature and extent of KPMG's duty to protect confidentiality or convert it into a duty to do no more than take reasonable steps to protect it. This would run counter to the fundamental principle of equity that a fiduciary may not put his own interest or those of another client before those of his principal. In my view no solicitor should, without the consent of his former client, accept instructions unless, viewed objectively, his doing so will not increase the risk that information which is confidential to the former client may come into the possession of a party with an adverse interest.” interest.”
“[42] In my opinion, whatever may be the position where solicitors owe a fiduciary duty to the party seeking an injunction, or where (as in Carter Holt) they owe an explicit contractual duty, in a case such as the present the onus does lie on the party seeking the injunction to show a threat of misuse sufficient to justify the injunction; and I do not think the existence of a common factual element is sufficient to shift the onus of proof. However, proof of a real and sensible possibility of misuse may be sufficient to justify an injunction.”
“7. On13 February 2019 , Mr Shapiro telephoned me and referred to the settlement agreement with Dartington. Mr Shapiro said that, as part of Glencairn’s settlement with Dartington, Dartington had obtained payment from Glencairn in exchange for their agreement to redesign one of their glasses. Mr Shapiro indicated that his client might be open to similar settlement terms.”
“6. I understand that Mr Miller or Glencairn is asserting that, during my settlement conversation with Mr Miller, I revealed that I was aware of the terms of the settlement between Glencairn and Dartington that had recently been reached in connection with UK legal proceedings. I emphatically deny that I said anything of the sort to Mr Miller. In fact, I told him that I did not know the terms of the settlement, but that there was speculation on the part of the [Final Touch] team about the terms of the settlement, and I stated that, if the speculation was correct, a similar deal might be considered as a basis for productive discussions between [Final Touch] and Glencairn. 7. Mr Miller told me there was no interest on the part of Glencairn in any such discussions, and no further communications about settlement of the United States dispute have taken place. Mr Miller did not tell me anything about what the terms were of the Dartington-Glencairn settlement. 8. I am certain that I did not tell Mr Miller that I knew the terms of the settlement both because I have a clear memory of the conversation and because I also have a clear memory of a prior telephone conversation with Ms Ward, in which she confirmed that she herself was not privy to the terms of the Dartington settlement as those terms had been withheld from her by the solicitors who were acting for Dartington in the UK proceedings. I never learned from Ms Ward, any of her colleagues or my client anything about the actual terms of the Dartington-Glencairn settlement at that time or to the present.”
“[15] There is no doubt that the court retains a supervisory jurisdiction over solicitors which permits it, in a proper case, to take steps to ensure that a solicitor does not remain on the record for a party in litigation. That jurisdiction must, in my view, be exercised with caution, as in general parties to litigation are entitled to the advisers they have chosen.”