CASE UPDATE: GLENCAIRN IP HOLDINGS LTD & ANOR V PRODUCT SPECIALITIES INC & ORS [2020] EWCA CIV 609
In Glencairn IP Holdings Ltd & Anor v Product Specialities Inc & Ors [2020] EWCA Civ 609 (“Glencairn v Product Specialities”), the England and Wales Court of Appeal (“EWCA”) dealt with whether a firm of solicitors who previously acted for Party A against Party B in a set of litigation can be restrained from acting for Party C against Party B in a similar set of litigation, when the earlier set of litigation has been settled through a mediation and/or confidential settlement.
The facts. We will not be focussing on the facts as we will only be focussing on the key legal issues in this update.
The grounds of appeal. The appeal was brought on two grounds ([35] Glencairn v Product Specialities): firstly, that the judge erred in not applying the test set out in Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 and had he done so, he would have concluded that Glencairn was entitled to the order it sought; secondly, that even if the judge had applied the correct test, his conclusion that the balance of justice was in favour of dismissing the application was unsustainable and made errors of law and law.
We will focus on the first ground in this brief update as it sets out the legal principles. However, we would urge practitioners to read the facts and the second ground as well.
First ground rejected. The EWCA rejected the first ground ([66] Glencairn v Product Specialities), holding that it is wrong to “equate the position of a solicitor who formerly acted against the applicant … with that of a solicitor who was formerly acting for the applicant.”
The EWCA endorsed Lightman J’s decision in Re a Firm of Solicitors [1997] Ch 1 at 13 as setting out the difference between the two cases and quoted with approval Arnold J (as he then was) in Shlosberg v Avonwick Holdings Ltd [2016] EWHC 1001 (Ch) at [148]. The EWCA held that “… in "no relationship" cases where a solicitor for the opposing party has come into possession of the applicant's privileged information, the courts have not applied the special Bolkiah jurisdiction, imposing the burden of proof on the solicitor to show that there is no risk of disclosure of the confidential information. Rather the general law on confidentiality has been applied, that the burden of proof is on the applicant to show that there is a real risk of prejudice to him from the other party's solicitor having had access to confidential or privileged information. That is precisely why in the usual case, the appropriate remedy is not an injunction to restrain the solicitor from acting but an injunction to restrain use of the confidential or privileged information, which adequately protects the applicant. …” (emphasis added) ([68] – [68] Glencairn v Product Specialities)
The EWCA then held that the facts of Glencairn v Product Specialities fell somewhere in the middle of the spectrum between a position where the solicitor had formerly acted against the applicant and where a solicitor was formerly acting for the applicant. This is because the confidential information was not inadvertently disclosed but was disclosed in the context of a mediation or settlement. ([70] Glencairn v Product Specialities).
Nonetheless, the EWCA held that the judge found that the only confidential information was in the settlement agreement, and hence it was of no relevance that the solicitors involved in the mediation had signed the declaration of confidentiality ([71] Glencairn v Product Specialities).
Further, even if an express contractual obligation of confidence is a fiduciary one, it is not sufficient to “bring into play the Bolkiah jurisdiction imposing the burden of proof on the solicitor for the opposing party to show that there is no risk of disclosure or prejudice” ([75] Glencairn v Product Specialities). The EWCA held at [75] Product Specialities that:
“… there is an obvious distinction between legal professional privilege and without prejudice privilege… In the former case, the former client has imparted privileged information to his solicitor during the course of a true fiduciary relationship, in circumstances where the solicitor now wishes to act against the former client. In those circumstances, the strict Bolkiah test and the placing of the burden of proof on the solicitor are clearly justified. In the case of without prejudice privilege, the applicant and his legal advisers will have chosen to share privileged information with his opponent and the opponent's legal advisers during the course of a mediation or settlement discussions. Whilst the opponent and his legal advisers cannot use the privileged information other than for the purposes of the mediation or settlement discussions, they have not received it in a fiduciary capacity, as the underlined passage from Lord Millett's article makes clear. If, for whatever reason, the information is misused and/or openly disclosed or there is some threat that it will be, the remedy of restraining the opponent and his legal advisers from misusing the information is usually sufficient protection. If the applicant wishes to obtain wider injunctive relief such as sought in this case, the burden of establishing that such relief is necessary should be on the applicant as it would be in the general law of confidentiality, without what might be described as presumptions in favour of the applicant such as apply under the strict Bolkiah test.”
(emphasis added)
The EWCA thus held that the judge was right in concluding that the Bolkiah jurisdiction did not apply on the facts of Glencairn v Product Specialities, where “the solicitor for an opposing party has previously acted for another opposing party against the same applicant and has access to privileged confidential in the course of the mediation” ([80] Glencairn v Product Specialities).
Discussion. Readers may recall our earlier article “Same lawyer acting against same counterparty in subsequent proceedings”, where we addressed the Singapore Court of Appeal decision of LVM Law Chambers LLV v Wan Hoe Keet and Anor [2020] SGCA 29 (“LVM v WHK”) where the Court of Appeal set out its guidance on whether a lawyer who acted for Party A in a previous set of proceedings can act for Party C against Party B in subsequent proceedings.
To recap, in LVM v WHK, the Singapore Court of Appeal had approached the issue from the perspective of the duty of confidence (see [13] LVM v WHK) and held that even if there was no contractual duty of confidence, there may be an equitable duty of confidence ([15] LVM v WHK). The Singapore Court of Appeal also held that the burden of proof rests on the party seeking the injunction to show “a real and sensible possibility” of information being misused ([19] – [24] LVM v WHK).
Importantly, the Court of Appeal at [20] LVM v WHK held that the case is “distinguish[able]… from the Privy Council decision of Prince Jefri Bolkiah v KPMG … where a former client (to whom the lawyer owed fiduciary duties) was the party applying for an injunction. In such a situation, an injunction would rightly be granted against the lawyer upon the demonstration of any risk of misuse of confidential information obtained from the former client” (emphasis in original).
While this article does not seek to engage in a comparative analysis, it appears that (at least on a broad brush approach) both the courts in England and Wales and in Singapore make a clear distinction between a situation where an injunction is sought against a solicitor by his former client versus where an injunction is sought against a solicitor by a former opposing party. As such, practitioners should bear this distinction in mind.
Tags: Injunction; Bolkiah jurisdiction; Legal profession privilege; Without prejudice privilege; Duty of confidence
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