Glencairn IP Holdings Ltd & Anor v Product Specialities Inc & Ors

The strict jurisdiction protecting a former client’s confidential information applies where the solicitor obtained that information through a true fiduciary relationship. It does not extend to a solicitor who obtained an opponent’s confidential information during earlier mediation or settlement discussions.

In a former-opponent case, the applicant bears the burden of establishing a real risk of misuse and prejudice. The court conducts a balancing exercise, including whether an injunction against use would provide sufficient protection and the prejudice caused by restraining the solicitor from acting. An information barrier need not be part of the firm’s established structure. Its effectiveness is a question of fact.

Glencairn brought intellectual property proceedings against Final Touch. Final Touch instructed Virtuoso, a firm which had previously represented another defendant in similar litigation brought by Glencairn. That earlier dispute had involved a confidential mediation and had ended under a confidential settlement agreement.

Glencairn sought an order restraining Virtuoso from continuing to act, alleging a risk that confidential settlement information could reach Final Touch. The Intellectual Property Enterprise Court refused the application in [2019] EWHC 1733 (IPEC).

The appeal concerned whether the strict former-client jurisdiction established in Prince Jefri Bolkiah v KPMG applied to a former-opponent solicitor and, if not, whether the judge’s assessment of the information barrier and risk of disclosure was sustainable.

1. Appeal dismissed. The strict Bolkiah jurisdiction applies where there is or was a true fiduciary relationship between the applicant and the solicitor. Its paradigm is a former client whose solicitor obtained privileged confidential information during the retainer. A duty of confidence owed to an opposing party, whether contractual, implied or equitable, does not itself engage that jurisdiction.

2. Information disclosed to an opponent’s solicitors during mediation or settlement discussions is protected, but it was not received in a fiduciary capacity equivalent to a solicitor-client retainer. The New Zealand decision in Carter Holt did not represent English law because it wrongly transferred the Bolkiah burden of proof to the opposing solicitor.

3. In a former-opponent case, the general law of confidentiality applies. The applicant bears the burden throughout of proving a sufficient risk of misuse and prejudice. The court may restrain the solicitor from acting in an appropriate case, but must balance the parties’ respective prejudice and consider whether the less onerous remedy of restraining use of the information would provide adequate protection.

4. The effectiveness of an information barrier is a question of fact. There is no binding rule that the barrier must be an established part of the firm’s organisational structure. Because Glencairn bore the burden of proof, it was insufficient merely to criticise the barrier for failing to meet the stringent structural features discussed in Bolkiah.

5. The first-instance judge was entitled to find that the only established relevant confidential information was in the settlement agreement, that it had not reached the Final Touch team and that the likelihood of future disclosure was very low. Glencairn had not challenged the relevant evidence or proved that the barrier failed. Its own openly served evidence had also disclosed the substance of the alleged confidential information.

6. The judge’s evaluative conclusion contained no identifiable flaw and the balance of justice favoured refusing the injunction. The relatively short delay in bringing the application would not, by itself, have justified refusal.

• Court of Appeal (Civil Division): The appeal was dismissed. The court upheld the refusal to restrain Virtuoso from continuing to act.
• Intellectual Property Enterprise Court: In [2019] EWHC 1733 (IPEC) , His Honour Judge Hacon refused Glencairn’s application to restrain Virtuoso from acting for Final Touch.