Bankrupts, Trustees In Bankruptcy And Privilege In England

Mr Shlosberg, a Russian businessman domiciled in England who was made bankrupt in January of last year, has obtained an injunction restraining Dechert LLP from acting on behalf of the main claimant, Avonwick Holdings Limited (Avonwick) in proceedings in which he is a defendant.

Dechert were previously acting as solicitors for both Shlosberg's Trustees in Bankruptcy (Trustees) and Avonwick, in the ongoing litigation. Dechert reviewed a large quantity of privileged documents provided by Mr Shlosberg to the Trustees.

Avonwick subsequently wanted to rely on the information Dechert had learned from that review in the separate ongoing proceedings involving Mr Shlosberg.

Mr Shlosberg sought an order of the court that Dechert cease to act for Avonwick on the basis that the information Dechert had learned was privileged.

The court therefore had to determine whether a bankrupt's right to privilege in respect of information contained in documents within the Trustees' possession passed to the Trustee by virtue of his bankruptcy.

Decision

The court held that they did not. Mr Schlosberg was therefore entitled to prevent the review and dissemination of his privileged information, including by Dechert in the context of the separate proceedings as opposed to in its capacity as...