British Sky Broadcasting Group Plc & Anor v Virgin Media Communications Ltd & Ors

The restriction on using disclosed documents for a collateral purpose differs from a solicitor’s duty of confidence to a client. The restriction protects the administration of justice and is subject to the court’s power under Civil Procedure Rules 1998, rule 31.22, to permit another use.

A lawyer who receives an opponent’s confidential documents through disclosure is not generally disqualified from acting in related proceedings. Ordinarily, the lawyer’s observance of the restriction and any confidentiality undertaking provides sufficient protection. Disqualification may be justified in a rare case involving a material risk of misuse, but a speculative or fanciful risk is insufficient. The court must also respect the litigant’s interest in retaining lawyers of choice and the efficient administration of justice.

Two groups of companies competing in the United Kingdom pay television market were involved in High Court competition proceedings, regulatory investigations and related proceedings before the Competition Appeal Tribunal. The High Court action alleged abuse of a dominant position. The parties exchanged extensive disclosure, much of which was commercially sensitive and confined to external lawyers subject to confidentiality undertakings.

Sky sought to prevent lawyers who inspected its sensitive documents in the High Court action from also representing Virgin in the related proceedings. Lewison J dismissed the application, finding that the procedural restrictions and undertakings provided adequate protection and that any risk of unauthorised use was fanciful. The proposed restriction would also disrupt trial preparation and require Virgin to change its legal team.

The central issue on appeal was whether the possibility of conscious or unconscious use of disclosed information justified excluding Virgin’s chosen lawyers from the confidentiality ring unless they ceased acting in the related proceedings.

1. Appeal dismissed. The Court of Appeal upheld Lewison J’s refusal to restrict inspection of the sensitive documents. A litigant should ordinarily remain free to instruct lawyers of choice, particularly where the lawyers already act for that litigant in related matters and possess relevant knowledge of its position.
2. The obligation against collateral use of disclosed documents is not identical to the duty of confidence owed by a solicitor to a client. The former obligation protects the administration of justice and is subject to the court’s power under rule 31.22 of the Civil Procedure Rules 1998 to permit another use. The absolute language in Riddick v Thames Board Mills Ltd [1977] 1 QB 881 had been qualified by Crest Homes Plc v Marks [1987] 1 AC 829 and by rule 31.22. Riddick therefore did not establish that information obtained on disclosure could never, with permission, be used to obtain redress for another injury.
3. The principles governing a former solicitor’s possession of confidential client information, discussed in Bolkiah v KPMG [1999] 2 AC 222, did not govern information received from an opponent through disclosure. It is usually sufficient to rely on a solicitor’s recognition of the restriction on collateral use. Adex International v IBM was a rare and materially different case. The approach taken in Carter Holt Forests Ltd v Sunnex Logging Ltd [2001] 3 NZLR 343, concerning an express confidentiality agreement in mediation, could not generally be applied to ordinary disclosure.
4. The Court endorsed Merck & Co v Interpharm [1992] 3 FC 774. The implied undertaking does not ordinarily justify removing a solicitor who might misuse disclosed information. A breach may be addressed through contempt proceedings. That approach balances the undertaking against freedom to choose legal representatives and the efficient administration of justice.
5. On the evidence, any risk that Virgin’s lawyers would consciously or unconsciously misuse the documents in the tribunal or regulatory proceedings was speculative and fanciful. The confidentiality arrangements arose from the documents’ commercial sensitivity and did not justify placing external lawyers in a more restrictive position than parties or in-house lawyers would otherwise occupy.
6. If the documents later showed that another tribunal or regulator was proceeding on a false basis, it was desirable that the lawyers could seek the High Court’s permission to deploy the relevant material. Disclosure might conceivably disqualify solicitors from acting for a different party in a rare case, but it was difficult to envisage disclosure between the same parties precluding the lawyers from acting in related proceedings.

1. Court of Appeal (Civil Division): Dismissed Sky’s appeal and affirmed the refusal to restrict access to sensitive disclosed documents.
2. High Court of Justice, Chancery Division: Lewison J dismissed Sky’s application. He held that the Civil Procedure Rules 1998 and the proposed confidentiality undertakings adequately protected Sky, that the risk of misuse was fanciful, and that the proposed order would disproportionately disrupt Virgin’s legal representation.