The defendant firm of solicitors sought leave to appeal against an injunction requiring them not to act for a client in making a bid to take over the business of the claimant, a former client of the firm.
Held: Leave was refused. The appeal had no prospect of success. The principle against a firm of solicitors acting against former clients was not restricted to not acting in the same transaction. ‘The court must consider what the relationship is between the two transactions concerned.’ That a takeover might be accepted was not sufficient to avoid the presence of a potential conflict of interest. As to the possible use of a Chinese Wall: ‘had the applicants had a sufficient system for preventing conflicts of interest from arising and legitimate allegations of breach of confidence arising, the fact that they had advised in a substantial way about the Davies arrangements would have alerted them at any rate to the possibility that a conflict of interest had arisen. ‘
Judges:
Pill, Kay LJJ
Citations:
[2004] EWCA Civ 741
Links:
Jurisdiction:
England and Wales
Citing:
Appeal from – Marks and Spencer plc v Freshfields Bruckhaus Deringer (A Firm) ChD 2-Jun-2004
The claimant sought an injunction preventing the respondent form of solicitors acting for a client in a bid for the claimant, saying that the firm was continuing to act for it, and that a conflict of interest arose.
Held: Though the . .
Cited – Rakusen 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 – Dunford and Elliott v Johnson and Firth Brown CA 1977
A report which had been prepared confidentially was disclosed to 43 per cent of shareholders of a company (the institutional shareholders), but not the others, who then complained to the court.
Held: The others were entitled to the . .
Cited – Young, Young, Irby v Robson Rhodes and Frank Attwood ChD 30-Mar-1999
Where a merger was proposed between two accountancy firms, who had provided litigation support services to opposing sides in a case, it was necessary to separate the two halves most rigorously including physical separation in order to ensure no . .
Cited – Prince Jefri Bolkiah v KPMG (A Firm) HL 16-Dec-1998
Conflicts of Duty with former Client
The House was asked as to the duties of the respondent accountants (KPMG). KPMG had information confidential to a former client, the appellant, which might be relevant to instructions which they then accepted from the Brunei Investment Agency, of . .
Cited – Mothew (T/a Stapley and Co) v Bristol and West Building Society CA 24-Jul-1996
The solicitor, acting in a land purchase transaction for his lay client and the plaintiff, had unwittingly misled the claimant by telling the claimant that the purchasers were providing the balance of the purchase price themselves without recourse . .
Cited – Boulting v Association of Cinematograph, Television and Allied Technicians CA 1963
There must be a real conflict and not a theoretical conflict, before a solicitor can be restrained from acting in a matter against a former client. In order to give fully informed consent, the person entitled to the benefit of the rule must: ‘fully . .
Cited – Newton v Cammell Laird and Co (Shipbuilders and Engineers) Ltd CA 1969
The court considered when the limitation period in a personal injury claim would start to run, where the plaintiff might be unaware of the damage: ‘You have to ask yourself: At what date was it reasonable for him – for the sick man himself – to have . .
Cited – Re Baron 2000
In order to obtain an order restricting the ability of a firm of solicitors to act against a former client for a conflict of interest, the applicant had to show a reasonable apprehension of potential conflict on the part of the former client and not . .
Cited – Bristol and West Building Society v Baden Barnes Groves 22-Nov-1996
The court considered a solicitor’s duties to avoid a conflict of interest in a conveyancing transaction as between a lay client and a lender. Chadwick LJ said: ‘In my view, the words ‘if in the course of doing the work he is instructed to do’ . .
Cited by:
Mentioned – Ratiu, Karmel, Regent House Properties Ltd v Conway CA 22-Nov-2005
The claimant sought damages for defamation. The defendant through their company had accused him acting in such a way as to allow a conflict of interest to arise. They said that he had been invited to act on a proposed purchase but had used the . .
Lists of cited by and citing cases may be incomplete.
Legal Professions
Updated: 11 June 2022; Ref: scu.199982