Western Avenue Properties Ltd & Anor v Soni & Anor

Where a former solicitor possesses confidential information belonging to a former client, and that information may be relevant to a dispute in which a new client has an adverse interest, the former client need not catalogue every item of information. The evidential burden shifts to the solicitor and firm to establish that there is no real risk of disclosure or misuse. The risk need not be substantial, but must be more than fanciful or theoretical. The court should intervene unless objectively satisfied that accepting the new instructions will not increase the risk. The interests or choice of legal representation of the new client are not balanced against the former client’s confidentiality rights.

The claimants sought an injunction restraining their former solicitor, employed by the defendant firm, from acting for former business associates in contemplated disputes concerning the claimants. The solicitor had acted as an in-house lawyer for the claimants for about eleven months and had access to extensive legal, financial and business information. The defendants relied on advice from the SRA and a waiver signed by the proposed new clients.

The court considered whether the claimants had established possession of confidential information which was or might be relevant to an adverse matter, whether the defendants had shown that there was no risk of misuse or disclosure, and what orders should be made on the related applications.

1. Injunction granted. Applying Bolkiah v KPMG [1999] 2 AC 222, the claimants had to establish that the defendants possessed confidential information belonging to them, without consent to disclosure, and that the information was or might be relevant to a matter in which the Thukrals’ interests were or might be adverse.
2. The burden on the claimants was not heavy. A full catalogue of the information was unnecessary and impracticable. The solicitor’s eleven months as a full-time in-house legal adviser made it inevitable that she had acquired extensive familiarity with the claimants’ legal and financial affairs. The claimants therefore passed both stages of the initial test.
3. Once that threshold was met, the evidential burden shifted to the defendants to show that there was no risk that the confidential information would come into the possession of the new clients. The risk had to be real rather than fanciful or theoretical, but it need not be substantial. The continuing possibility of subconscious use of confidential information was sufficient to prevent the defendants discharging that burden.
4. A waiver obtained from the new clients did not resolve the problem. Even assuming its validity, it could not satisfactorily eliminate the risk of subconscious use. The solicitor’s conscientious approach to the SRA and her awareness of professional duties did not remove that risk.
5. The court followed the approach restated in Georgian American Alloys Inc v White and Case LLP [2014] 1 CLC 86: no balancing exercise was appropriate, and the impact of the injunction on the new clients’ choice of legal representation was irrelevant. The court also applied the relevance principle referred to in E-Clear (UK) Plc v Elias Elia [2012] EWHC 1195 (Ch).
6. The hearing was ordered to be private to protect confidential and privileged information. The application for disclosure of the waiver and aspects of the Part 18 request became unnecessary or were limited in consequence. An extension of time for service of the defence was granted.

Not stated in the judgment.