David Lee and Co (Lincoln) Ltd v Coward Chance: ChD 1991

The liquidator of two companies brought actions asserting fraud, including by a firm of solicitors as to a faudulent breach of trust. Two firms which had been previously involved on differing sides, merged. The defendants sought an order to prevent the new firm acting for the liquidators.
Held: Each such case must be examined on its own facts. No general rule existed. Where serious dishonesty was alleged however, that was enough to warrant extra care.
Browne-Wilkinson J said: ‘When one has sensitive information in a firm or in any other group of people, there is the element of seepage of that information through casual chatter and discussion, the letting slip of some information which is not thought to be relevant but may make the link in the chain of causation or reasoning. It therefore is important, I think, to see what is the position on the facts of this case.’ On the facts, in this case: ‘I am not satisfied that the amalgamated firm has demonstrated that the Chinese walls that they are proposing to erect will be soundproof.
Experience in this court demonstrates that the maintenance of security on either sides of Chinese walls in the context of the city does not always prove to be very easy. I think it is a very difficult task. No concrete steps have so far been taken to ensure that staff, as opposed to the partners, were aware and are aware of the delicacy of the position.’


Browne-Wilkinson J


[1991] Ch 259, [1990] 3 WLR 1278


England and Wales


AppliedRakusen v Elliss, Munday and Clark 1912
A firm of solicitors had two partners, who did business separately without having any knowledge of the affairs of each other’s clients. The plaintiff consulted one partner in an action for wrongful dismissal a company. He changed his solicitors and . .

Cited by:

CitedStiedl v Enyo Law Llp and Others ComC 18-Oct-2011
The applicant, defendant in the main proceedings, sought an injunction to restrain the solicitors from acting for the claimant and from making any use of documents which had come into their privileged possession whilst acting for him. . .
Lists of cited by and citing cases may be incomplete.

Legal Professions

Updated: 04 May 2022; Ref: scu.445696