National Westminster Bank Plc v Bonas

A solicitor’s duty of confidentiality continues after the retainer ends. It prohibits both disclosure and misuse of confidential information, subject to recognised exceptions. A solicitor must decline to act against a former client where the solicitor possesses relevant knowledge acquired during the earlier retainer. A former client seeking damages must prove that the breach caused actionable loss. The court applies a counterfactual inquiry: whether the loss would probably have occurred had the later client used an independent solicitor without the confidential information. Negligence adds nothing where the alleged duty and loss are the same as those arising from breach of confidence. Contractual interference claims fail where the alleged agreement was not legally binding, and honest advice given on the facts reasonably understood by the solicitor is not unlawful interference. Questions about the wider scope of interference by unlawful means were left undecided.

Mr Bonas brought a Part 20 claim against his former solicitors, Brice Droogleever & Co, arising from their later advice to Mr Edwards, who had guaranteed Mr Bonas’s borrowing from National Westminster Bank and charged his flat as security.

Mr Bonas alleged breach of confidence, negligence, interference with alleged agreements concerning the sale of the flat and settlement of the Bank’s claim, and interference by unlawful means. He claimed that the solicitors’ conduct caused the Bank and Mr Edwards not to implement arrangements which would have limited his liability. The Bank claim was settled separately, leaving the Part 20 claim for determination.

1. Confidentiality. The duty of confidentiality survives termination of the retainer and ordinarily prevents a solicitor from disclosing or using information obtained from a former client. It is no defence that the solicitor was acting in the interests of a later client. A solicitor who has acquired relevant knowledge must decline instructions to act against the former client.
2. The court found that Mr Brice had acted in breach of confidence on numerous occasions. He had used or offered to use information and impressions derived from his earlier retainer, and should not have acted for Mr Edwards against Mr Bonas. The limited waiver arising in the fee proceedings did not authorise wider use of confidential information in other proceedings.
3. There was nevertheless no actionable loss. The Bank’s decisions were driven by the age and history of the debt, Mr Bonas’s conduct, the failed repayment arrangements, the IVA proposal and the Bank’s commercial assessment. The Bank would have acted substantially as it did without Mr Brice’s representations. Mr Edwards likewise acted from his own interests and mistrust, not because of tainted advice. The necessary causal link was absent.
4. Negligence. The negligence claims added nothing. Outside the solicitor-client duties, no duty of care was owed; within those duties, the claims failed for the same reasons as the confidence claims.
5. Contract and interference. Neither the alleged Sale Agreement nor the alleged Compromise Agreement was a binding contract. Mr Edwards had not agreed to sell or pay the specified sum, and the Bank received no consideration for promising to accept less than the debt. Applying (1884) 9 App Cas 605, a promise to pay part of an existing debt supplied no consideration. The solicitor’s honest advice, given on the information reasonably available to him, did not constitute unlawful interference.
6. The wider issues concerning whether interference by unlawful means required an intention to harm the claimant, or was confined to business interests, were left undecided. The Part 20 claim was dismissed.

The judgment records that the Bank issued proceedings against Mr Bonas in 1996. Mr Bonas later amended his defence and counterclaim to add the Part 20 claim against Brice Droogleever & Co. The Bank claim was settled by a Tomlin Order, but the Part 20 claim proceeded to trial and was dismissed by the High Court.