Gus Consulting GmbH v Leboeuf, Lamb, Greene & Macrae

Permission to appeal may be granted where a judge correctly states the governing law but it is properly arguable that the law was misapplied to a close factual assessment. In a former-client confidentiality case, the decisive question is whether the firm has taken sufficient precautions to prevent inadvertent disclosure. Evidence of staff members may not, without more, establish that adequate protective arrangements exist. A distinction may be material between a screened individual lawyer joining a new firm and a larger litigation team joining a firm whose existing personnel had acted in the relevant former-client transactions.

CAIB sought an injunction preventing LLGM from acting for DCL in an arbitration. DCL alleged that CAIB was the true principal behind arrangements for an investment in Gazprom. LLGM had formerly advised CAIB on Russian-equity transactions relevant to that arbitration, but accepted DCL's retainer without identifying that former retainer.

His Honour Judge Mackie QC dismissed CAIB's application. He held, by a narrow margin, that LLGM had shown the risk of inadvertent disclosure of CAIB's confidential information to be theoretical. He placed particular weight on Tuckey LJ's observation in Koch v Richards Butler that a robust view was needed. CAIB applied for permission to appeal, contending that the judge had misapplied the principles in Bolkiah v KPMG and Koch v Richards Butler.

1. Permission to appeal was granted. Rix LJ considered that the proposed appeal had a real prospect of success and merited consideration by a full court. The first-instance decision was expressly a near-run matter. It was therefore properly arguable that the judge had applied the relevant law incorrectly to the facts, even if he had directed himself correctly.

2. The issue was whether LLGM had taken sufficient precautions to ensure that CAIB's confidential information would not be inadvertently disclosed in the arbitration. The former-client relationship, the broad allegations in the arbitration, and the extent of disclosure sought made that issue significant.

3. Rix LJ held that the judge's reliance on a need for robustness in Koch v Richards Butler required further examination. The factual setting could materially differ from a case involving one migrating lawyer who would have no further involvement in the litigation. Here, a larger litigation team had joined a firm whose existing personnel had participated in CAIB's relevant transactions.

4. May LJ agreed that the judge had not misdirected himself. However, it was properly arguable that he had misapplied the law. The finding that sufficient precautions had been taken depended on accepting staff evidence; May LJ considered that Bolkiah v KPMG made such evidence insufficient in the relevant circumstances. The court expressed no view on the eventual merits.

Costs were left to the court hearing the appeal. The appeal was to be heard by a constitution including at least one judge experienced in commercial matters, with a one-day estimate.

• Court of Appeal (Civil Division): granted CAIB permission to appeal from the Commercial Court's dismissal of its application for an injunction.
• High Court of Justice, Queen's Bench Division, Commercial Court: His Honour Judge Mackie QC dismissed CAIB's application, finding that LLGM had just shown the risk of inadvertent disclosure of confidential information to be theoretical.