English Court Refuses To Grant An Order Restraining A Firm Of Solicitors From Acting

Glencairn IP Holdings Ltd and another v Product Specialities Inc. (t/a Final Touch) and another [2019] EWHC 1733 (IPEC)

The English court has recently dismissed an application by Glencairn IP Holdings Ltd ("Glencairn") to restrain a firm of solicitors, Virtuoso Legal ("Virtuoso"), from acting for Product Specialities Inc. (t/a Final Touch) ("Final Touch"), in proceedings brought by Glencairn. Somewhat unusually, the basis for the application was that Virtuoso had previously acted for another, unrelated party in the defence of a similar set of proceedings brought by Glencairn, which had resulted in a confidential settlement. Applications to restrain a firm of solicitors from acting are more usually made by a former client of a firm when the firm is acting for a new client with an interest adverse to that of the former client.

Glencairn alleged that there was a risk that information confidential to Glencairn and known to solicitors within Virtuoso - such as its negotiating position and the terms on which it was prepared to settle the earlier proceedings - would inadvertently be passed to Final Touch. This was despite reassurances from Virtuoso that an information barrier had been put in place, and that the relevant fee earners were not aware of the confidential terms of the earlier settlement.

The Bolkiah test

The leading authority on the circumstances in which an English court can restrain a solicitor, who has relevant confidential information, from acting remains a case from over 20 years ago: Prince Jefri Bolkiah v KPMG (a firm) [1998] 2 AC 222 ("Bolkiah").

While there is no general principle which prevents a solicitor from acting against a former client after the relationship between them has terminated, complications can arise because the duty of confidence is a continuing one which survives the end of the professional client relationship. As such, the English court can restrain a solicitor, who has relevant confidential information, from acting for a new client with an interest adverse to that of a former client unless it is satisfied that there is no real risk of disclosure. The English court's jurisdiction to intervene is founded on the right of the former client to the protection of its confidential information, and the extent of the duty to preserve confidentiality is unqualified.

The former client must establish that:

The solicitor possesses confidential information (to the disclosure of which the former client has not consented)...