Glencairn IP Holdings Ltd & Anor v Product Specialities Inc (t/a Final Touch) & Anor

Applications to restrain solicitors from acting because they possess confidential information require a fact-sensitive and proportionate assessment. Where the solicitors never acted for the party seeking relief, no fiduciary relationship arises and the strict Bolkiah approach does not apply with full force. The applicant retains the overall burden of proving a sufficient risk of misuse or disclosure. That burden does not shift merely because confidential information was received in a mediation. A concrete example of a possible leak is unnecessary. The court should assess the effectiveness of any information barrier, the likely prejudice to the applicant, and the prejudice to the current client if the solicitors are removed. A small firm may face greater practical risks, but an information barrier is not thereby ineffective. The application was dismissed because the risk of disclosure was very low and the balance of justice favoured allowing the solicitors to continue acting.

Glencairn applied to restrain Virtuoso from acting for Final Touch in proceedings concerning alleged registered design, trade mark and passing-off infringements. Virtuoso had previously acted for Dartington in related litigation brought by Glencairn. During a confidential mediation, and subsequent settlement discussions, Virtuoso may have obtained information about Glencairn’s settlement position. Virtuoso later acted for Final Touch, with an information barrier separating the teams.

The application raised questions concerning the court’s jurisdiction over solicitors who were not parties, the applicable principles governing confidential information obtained in mediation, the burden of proof, the effectiveness of the information barrier, and the competing prejudice to the parties.

1. Jurisdiction. Although orders are generally not made against non-parties, the court has a supervisory jurisdiction over solicitors which permits it, in a proper case, to restrain them from remaining on the record.
2. Applicable class of case. The case fell into a third, intermediate class, distinct from cases involving a solicitor’s continuing fiduciary duty to a former client and from cases concerning only the ulterior use of disclosed documents. It was analogous to the mediation cases, including Carter Holt Harvey, because Virtuoso’s obligation arose from confidentiality attaching to the mediation.
3. Proportionality. The strict Bolkiah approach did not apply with full force. The court had to consider the likely impact of restraining Virtuoso on Final Touch, while recognising that the order sought would have a final effect. The assessment was whether the balance of justice favoured restraint.
4. Burden and evidence. Glencairn retained the overall burden of proof. There was no automatic evidential shift to Virtuoso. Glencairn did not need to provide concrete examples of how disclosure might occur, but had to establish a sufficient risk of misuse or disclosure.
5. Information barrier. The effectiveness of the barrier depended on the facts. The factors identified in Bolkiah remained relevant, but an established organisational barrier was not essential if the arrangements worked. A small firm might face greater risks, but could still operate an effective barrier.
6. Application. The court inferred that the Dartington team possessed at least some confidential information relevant to settlement negotiations. However, the evidence showed that the Final Touch team had not received relevant information and could not access the Dartington files. The likelihood of disclosure was very low. The prejudice to Glencairn if disclosure occurred was real, but the prejudice to Final Touch from losing its solicitors was also material.
7. Disposition. The balance of justice favoured refusing the injunction. The application was dismissed.