Re a Firm of Barristers and Attorneys

• Jurisdiction: Bermuda
• Judgment Date: 02 May 2014
• Date: 02 May 2014
• Docket Number: Civil Jurisdiction 2014 No 133
• Court: Supreme Court (Bermuda)

[2014] Bda LR 46

In The Supreme Court of Bermuda

Civil Jurisdiction 2014 No 133

In the matter of a Firm of Barristers and Attorneys

Mr C Hill and Mr C Foley for the Plaintiff

Mr J Elkinson for the Defendant

The following cases were referred to in the judgment:

Prince Jefri Bolkiah v KPMGELR [1999] 2 AC 222

Duncan v DuncanUNK [2013] EWCA Civ 1407

Davies v DaviesFLR [2001] FLR 39

Re ZUNK [2009] EWHC 3621 (Fam)

Re Solicitors' FirmUNK [2000] 1 Lloyd's Rep 31

Generics (UK) Ltd v Yeda Research and Development Co LtdUNK [2012] EWCA Civ 726

Acting against former client in divorce matter — Knowledge of client's affairs — Confidentiality — Obtaining former client's consent

RULING of Kawaley CJ

Introductory

1. The Plaintiff (P) applied for an interlocutory injunction restraining his former attorney (‘D1’) and D1's firm (‘D2’) from acting against him on behalf of his second wife in his second divorce. The Defendants had acted for P in his first divorce in 1997–1998, a retainer which lasted for less than six months and ended sixteen years ago. Counsel apparently accepted that the inter partes application for interim relief would, in practical terms, determine the final outcome of this matter. Nevertheless, the present Judgment is strictly only interlocutory in nature, despite being expressed in final terms.

2. The principles applicable to an application of this nature were largely agreed; in dispute was the application of the principles to the facts and, in particular, what policy considerations should be accorded greater weight. Mr Hill submitted the sanctity of attorney-client confidentiality tipped the scales in favour of granting injunctive relief in a case where it was clear that P had met the comparatively low threshold for obtaining injunctive relief. Mr Elkinson invited the Court to have regard to the limited range of specialist family lawyers in Bermuda and, implicitly, the importance of litigants being able to retain the lawyers of their choice. This area of the law does not appear to have been the subject of any considered local judgments.

3. The involvement of D2 was essentially peripheral, because no evidence was filed in support ofa case that even if D1 could not act, procedures had been put in place to ensure that D2 (deploying other lawyers) could properly act instead of D1 without any risk of a breach of confidence.

Findings: applicable legal principles

4. Paragraph 24 of the Barristers' Code of Professional Conduct 1981 provides as follows:

‘24. A barrister shall not act for an opponent of a client, or of a former client, in any case in which his knowledge of the affairs of such client or former client may give him an unfair advantage.’

5. This may be viewed as a codification of the common law rule that a lawyer should not act against a former client when he acquired confidential information from his previous retainer which may be relevant to his subsequent client's claim against the former client. This broad principle informs the more narrow principles governing when a lawyer may be restrained from acting against his former client. Lord Millett, in Prince Jefri Bolkiah v KPMGELR[1999] 2 AC 222, formulated the test (at page 235D-F) as follows:

‘Accordingly, it is incumbent on a plaintiff who seeks to restrain his former solicitor from acting in a matter for another client to establish (i) that the solicitor is in possession of information which is confidential to him and to the disclosure of which he has not consented and (ii) that the information is or may be relevant to the new matter in which the interest of the other client is or may be adverse to his own. Although the burden of proof is on the plaintiff, it is not a heavy one. The former may readily be inferred; the latter will often be obvious. I do not think that it is necessary to introduce any presumptions, rebuttable or otherwise, in relation to these two matters. But given the basis on which the jurisdiction is exercised, there is no cause to impute or attribute the knowledge of one partner to his fellow partners. Whether a particular individual is in possession of confidential information is a question of fact which must be proved or inferred from the circumstances of the case.’

6. Once a plaintiff discharges the comparatively light burden of proving that confidential information was received which is or may be relevant, the onus shifts to the defendant to show that there is no risk of confidential information being used to the disadvantage of the former client. That burden is a heavy one. Lord Millett went on in Bolkiah1 to state:

‘Once the former client has established that the defendant firm is in possession of information which was imparted in confidence and that the firm is proposing to act for another party with an interest adverse to his in a matter to which the information is or may be relevant, the evidential burden shifts to the defendant firm to show that even so there is no risk that the information will come into the possession of those now acting for the other party. There is no rule of law that Chinese Walls or other arrangements of a similar kind are insufficient to eliminate the risk. But the starting point must be that, unless special measures are taken, information moves within a firm. In MacDonald Estates v Martin77 DLR (4th) 249, Sopinka J said at p 269 that the court should restrain the firm from acting for the second client “unless satisfied on the basis of clear and convincing evidence that all reasonable measures have been taken to ensure that no disclosure will occur.” With the substitution of the word “effective” for the words “all reasonable” I would respectfully adopt that formulation…

I am not satisfied on the evidence that KPMG have discharged the heavy burden of showing that there is no risk that information in their possession which is confidential to Prince Jefri and which they obtained in the course of a former client relationship may unwittingly or inadvertently come to the notice of...