Mireskandari v The Law Society & Ors

Where a solicitor’s firm takes possession of documents which may contain privileged or confidential material, an application to restrain the firm requires credible evidence that relevant confidential information has actually been obtained and read by persons acting adversely. Mere custody of files, the firm’s involvement in an intervention, or access by independent counsel is insufficient. The burden of showing possession of relevant confidential information remains on the applicant. Only then does the evidential burden shift to the firm to demonstrate effective arrangements preventing disclosure. Properly structured independent-counsel and information-separation procedures may adequately protect privilege and confidentiality.

The applicant, a solicitor, brought a Part 8 claim urgently before the impending Employment Tribunal proceedings between himself and the Solicitors Regulation Authority. The Law Society had intervened in his former firm’s practice. Russell-Cooke acted both as intervention agents and for the SRA in the Employment Tribunal proceedings. Independent counsel was appointed to examine documents over which privilege might be claimed.

The applicant sought delivery up of documents and witness statements identifying possession, access and use of the Employment Tribunal papers. He alleged a conflict of interest and a risk that privileged material had reached Russell-Cooke or the SRA. The central issue was whether the evidence justified relief to protect legal professional privilege and confidential information.

1. The application was refused. The applicant had not produced credible evidence that Mr Gould or any person at Russell-Cooke had opened and read documents containing confidential information relevant to the Employment Tribunal proceedings. Mere custody of boxes or files, the appointment of Russell-Cooke as intervention agents, and access by independent counsel did not discharge that burden.
2. The court explained the principles in Prince Jefri Bolkiah v KPMG [1999] 2 AC 222. A former client seeking to restrain an adviser must establish that the adviser possesses confidential information, that the information was imparted in confidence without consent, and that it is or may be relevant to a matter in which the new client’s interests are adverse. The burden is not heavy, but the issue is fact-sensitive. No presumption arises merely because the adviser acts against a former client.
3. Once possession of relevant confidential information is established, the evidential burden shifts to the firm to show that there is no real risk of disclosure. Effective information barriers or comparable arrangements may satisfy that burden. The court held that this was not a case of a former solicitor acting against a former client, because Russell-Cooke had never acted for the applicant.
4. The arrangements were effective. Privileged or potentially privileged material was directed to independent counsel, material relating to the Employment Tribunal proceedings was returned, and Russell-Cooke staff dealing with those proceedings were not given access. The evidence did not establish that administrative cataloguing, scanning, handling of loose papers, or opening files for limited administrative purposes had exposed privileged material.
5. The court was satisfied that there was no significant risk justifying the relief sought. Directions would later be sought concerning disputed privilege claims, and the relevant files were to remain unread pending that determination. The applicant’s allegations of deliberate delay, conflict and misuse of privileged material were unsupported.

Not stated in the judgment.