Conflict Checks and Confidential Information: a salutary reminder of the limits of injunctive relief

Published 24 May 2023

The recent decision in Bank of London Group Ltd v Simmons & Simmons LLP [2022] serves as an important reminder of the limits of injunctive relief, and the need for solicitors to accurately perform and act on conflict checks when taking on new clients and opening new matters.

In this case, the Claimant was a start-up clearing bank who first approached the Defendant firm of solicitors in March 2022 to review and advise on various draft agreements and policy documents. The team instructed by the Claimant was unaware that a different team within the firm had a longstanding relationship with another client (BLME) and was advising in relation to a passing-off claim against the Claimant, the retainer for which pre-dated the firm’s engagement by the Claimant by several months.

Although a conflict check had been carried out on the Claimant’s instruction, human error led to the conflicts report, which was circulated via email, being missed.

The Claimant requested an injunction to prevent the Defendant from, amongst other things, divulging any confidential information received from the Claimant to BLME.

To grant the relief requested, the Court first had to consider whether the information the Claimant sought to protect was of a confidential nature. The allegedly confidential information was contained in four documents: a proposition document, drafts of a service agreement, a service order form, and a client outsourcing document. The Judge concluded that the Defendant was in possession of confidential information, particularly as the Defendant was provided with the documentation in the context of a solicitor and client relationship. 

The Court then considered whether the documents included confidential information relevant to the passing-off claim. The Judge was not satisfied that the Claimant had identified, other than broadly, confidential information which was relevant to the passing-off claim.

Finally, for an injunction to be granted there must be a real risk of disclosure of the confidential information. The Judge rejected the Claimant’s submission that all effective measures had not been taken to prevent disclosure. It was held that the Defendant had established an effective information barrier as soon as practicable thereby eliminating any real risk of information being leaked.

The Injunction Application was therefore dismissed by the Court.

When considering whether to apply for a pre-emptive injunction to prevent a potential breach of confidence, as illustrated by this case, the key question is whether you can demonstrate a real risk of the breach occurring.