Injunctive relief in protection of confidential information created during privileged advice (The Bank of London Group Ltd v Simmons & Simmons LLP)

07 Dec 2022

The Court was seized with a claim by a start-up bank for an injunction to protect information alleged to be confidential by reason of its creation during the defendant, solicitor’s retainer to provide advice.  The Court had to decide whether the information was confidential and if so whether there was sufficient risk of breach such that an injunction was necessary to protect that confidentiality.

The Bank of London Group Ltd v Simmons & Simmons LLP [2022] EWHC 2617 (Ch)

What are the practical implications of this case?

This case is an important reminder of the duty of confidentiality owed by solicitors to clients and the need to perform and act on conflict checks when opening new files.

However, the decision is a particularly useful reminder of the practical limits on injunctive relief where the injunction sought is unlikely to have any practical bite because the risk of breach of confidentiality is limited.  It will be remembered that where there is evidence of an actual breach of confidence, then it is actionable per se (without proof of loss).  However, where the injunctive relief is anticipatory than the applicant must show that there is a more than fanciful risk of breach before successfully invoking the Court’s powers to grant an injunction.

What was the background?

The claimant, as the Judge noted, is “a start-up clearing bank – one of only six clearing banks in the United Kingdom in over 250 years.”

The claimant approached the defendant as a firm of solicitors to provide advice in Spring 2022.  The retainer was described in these terms: “reviewed and advised on a draft service agreement between the claimant and the provider of its patented technology and a draft service order form with the provider, on the claimant’s conflicts policy and on its chain outsourcing document in the period between March and July 2022” (the “Advice Retainer”).

The defendant charged the claimant only £5,435 (plus VAT) in respect of the Advice Retainer.  The evidence suggested that the defendant was a large firm with processes designed to protect confidentiality (once referred to colloquially as Chinese walls)

In the summer of 2022, the claimant was sued by a bank who was a potential competitor (and even possible client) alleging actionable passing off.  That competitor was represented by the defendant, albeit a different team and different fee earners were engaged in this passing off litigation retainer (the “Passing Off Retainer”).

The difficulty for the firm of solicitors was that the Passing Off Retainer pre-dated the Advice Retainer and accepting the latter retainer the solicitors had failed to identify a conflict flag in the firm’s conflict checking processes.

What did the court decide?

Although an application hearing, it was accepted that the Judge should approach matters as if he were considering final relief at a trial as the interim hearing would be dipositive of the claim.

The defendant denied the information was confidential asserting that some was in the public domain and that the claimant had failed to be sufficiently detailed in its case as to what amounted to confidential information.

The Judge noted that the defendant could not realistically argue that all the information provided under the Advice Retainer was in the public domain and noted that a client’s legitimate expectation of confidentiality was very high in the context of providing information to obtain advice from a solicitor.

The Judge accepted that there was a broad-brush approach to the assertion of confidentiality by the claimant but considered that was more relevant to the claimant’s ability to show a risk of breach than whether the information was in fact confidential at all.

So while the Court accepted that the information was confidential, it held that on the facts that there was little to no appreciable risk of disclosure in breach of the duty of confidentiality owed by the solicitors to the bank.

In this case, the factors that augured a refusal of injunctive relief included: the modest scope and value of the advisory work undertaken for the bank coupled with the compelling evidence, both of the defendant’s systems and of a lack of any material matters giving risk to even a risk of disclosure.

Further the Judge noted that:

The claimant argued, by reference to Mr Robertshaw’s third statement, that if the passing-off claim were pursued, it would be necessary in due course to adduce evidence to show the lack of overlap between its and BLME’s respective businesses. If that is so, it is difficult to see the basis for an injunction to restrain the divulgence of the information in question since the claimant would positively wish to bring it to the attention of BLME.”

There was a preliminary issue about the late service of the defendant’s witness evidence (according to an agreed timetable for exchange) but where there was no appreciable prejudice to the claimant.  The Judge also noted that the claimant had relied on the late filed evidence in support of its own position which the Judge noted made the claimant’s permission on admissibility difficult to understand.  The Court also found that the defendant’s witness evidence was served at a time and in a manner that allowed the claimant to respond to it, meaning there was no prejudice.  The evidence was allowed.

There were cost issues in relation to various applications and the matter overall with the Judge largely applying the standard principle that costs follow the event on the standard basis.

Case details

  • Court: Chancery Division
  • Judge: Stuart Isaacs KC (sitting as a deputy judge of the High Court)
  • Date of judgment: 20/10/2022

Article by Lauren Godfrey – first published by LexisNexis


Lauren Godfrey

Call: 2007


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