Guidance related to Rule B1.6: Confidentiality Generally

Confidentiality is related to conflict of interest but is also a separate and distinct question. The position is set out in rule B1.6 which states "You must maintain client confidentiality. This duty is not terminated by the passage of time. You must also supervise your employees to ensure that they keep client matters confidential. Only the client, Acts of the legislature, subordinate legislation or the court can waive or override the duty of confidentiality. The duty does not apply to information about any crime a client indicates they will commit."

This obligation to supervise extends to all outsourced providers of your business operations and services.

Confidentiality is a privilege which is exercisable by the client and which can therefore be waived by the client. It covers matters which are actually confidential and not in the public domain. For example, the contents of a document which has been registered in a public register can never be confidential, although the circumstances in which it was entered into, the advice given to the client and the instructions which were received from the client will be confidential so far as not set out in the document.

Specific situations

1. Party in dispute with former client

Where a practice unit used to act for one party and is now instructed by another party with whom the original client is in dispute, if the original client has instructed a new solicitor there will be no breach of rule B2.1 (Conflict of Interest) but you may not be able to act for the new client. If you are in possession of confidential information about your original client which would be of benefit to the new one, you must make certain that this is not disclosed and not made use of or used. The best way to achieve this is to decline to act for the new client.

You should always remember the client's perception of the matter which will be different from your own. He may make a complaint which will now go to the Scottish Legal Complaints Commission. While it will be a matter for your own judgment, you would not be criticised for declining to act. If the former client has not yet instructed a new solicitor, you should exercise even more caution before accepting new instructions as the original client may wish to instruct you in the matter anyway.

2. Solicitor moving practice unit

A solicitor who had moved from one firm to another was the subject of a case in England in 1995. He had had been a partner in one of the foremost firms specialising in the field of intellectual property and a firm which at all times had acted for the plaintiff in a patent case. The solicitor was not in any way involved in those proceedings and was engaged on work for different clients. He left the firm to join a different firm who were acting for the defendant in the patent case.

The plaintiff sought an injunction to prevent the individual solicitor - but not his new firm - being involved in any part of the patent case on the grounds that he might be in possession of confidential information. The High Court in London did not grant the injunction and set out the test relating to solicitors who move firms. A solicitor will only be disqualified from acting in a contentious matter against his previous firm's clients if he or she has (or there is a real risk that he or she has) relevant confidential information; that is, information which was confidential at the time of communication and which remains both confidential and relevant. The onus of proof is on the solicitor. While the matter has not been tested in the courts in Scotland the test set down in England is a valid one.

Information Barriers and Informed Consent

The question of information barriers (or Chinese Walls as they were called in the speeches) was considered at length by the House of Lords in the case of Bolkiah (Prince Jefri) v KPMG [1999] 2WLR 215 - also [1999] 1ALL ER 517. Lord Hope of Craighead (at page 217) stated that the solicitor's duty to preserve confidentiality "extends well beyond that of refraining from deliberate disclosure" and encompasses a duty to ensure "that the former client is not put at risk that confidential information which the solicitor has obtained from that relationship may be used against him in any circumstances". If the Court is satisfied that there is no risk of disclosure, it will not intervene.
Lord Millett stated (pages 226-227) "It is in any case difficult to discern any justification in principle for a rule which exposes a former client without his consent to any avoidable risk, however slight, that information which he has imparted in confidence in the course of a fiduciary relationship may come into the possession of a third party and be used to his disadvantage. Where in addition the information in question is not only confidential but also privileged, the case for the strict approach is unanswerable. Anything less fails to give effect to the policy on which legal professional privilege is based. It is of over-riding importance for the proper administration of justice that a client should be able to have complete confidence that what he tells his lawyer will remain secret. This is a matter of perception as well as substance. It is of the highest importance to the administration of justice that a solicitor or other person in possession of confidential and privileged information should not act in anyway that might appear to put that information at risk of coming into the hands of someone with an adverse interest…. The Court should intervene unless it is satisfied that there is no risk of disclosure. It goes without saying that the risk must be a real one and not merely fanciful or theoretical, but it need not be substantial."

He also said that the Court should restrain the firm from acting for the second client unless satisfied on the basis of clear and convincing evidence that effective measures have been taken to ensure that no disclosure would occur. Although there is no rule of law that Chinese Walls or other arrangements of a similar kind are insufficient to eliminate the risk, the starting point must be that unless special measures are taken information moves within a firm. He approved of the terms of a consultation paper prepared by the Law Commission in England in 1992 which described Chinese Walls as normally involving some combination of the following:

1. "The physical separation of the various departments in order to insulate them from each other - this often extends to such matters of detail as dining arrangements;

2. An education programme, normally recurring, to emphasise the importance of not improperly or inadvertently divulging confidential information;

3. Strict and carefully defined procedures for dealing with a situation where it is felt that the Walls should be crossed and the maintaining of proper records where this occurs;

4. Monitoring by compliance officers of the effectiveness of the Walls;

5. Disciplinary sanctions where there has been a breach of "the Wall."

In a subsequent case, also in England, the High Court held that where cases were being handled by two separate departments and all documentation was in hard copy only there was clear departmental and physical separation of the matters and that the information barrier was entrenched within the firms organisation structure (Current Law March 2000 page 147 item 460). In another case the Court of Appeal held that where a solicitor had no recollection of ever representing a party and checks on records held at her firm revealed no potential conflict of interest or risk of injustice, the solicitor should not be prevented from acting for the other party (Current Law February 2000 page 73 item 226). In both these cases, Prince Jefri was followed.

Although Prince Jefri was an English case dealing with a firm of Chartered Accountants, there can be no doubt that the same approach would be taken to a firm of solicitors in Scotland. It follows therefore that if there is a risk of inadvertent disclosure of confidential information, that is an unacceptable risk. The only way in which it could be avoided with certainty is for the firm declining to act for clients in circumstances where the clients themselves may perceive there to be a risk of a breach of confidentiality.

3.  Police enquiries and/or Production orders/search warrants

The Professional Practice Department regularly receive calls from solicitors who have been asked to give a statement either to the police or the Procurator Fiscal. The authorities on confidentiality were reviewed in the reported case of Micosta v. Shetland Islands Council 1983 SLT 483 where Lord President Emslie giving the opinion of the court stated the general rule, that communications passing between a party and his law agent are confidential. He then went on to say, "So far as we can discover from the authorities the only circumstances in which the general rule will be superseded are where fraud or some other illegal act is alleged against a party and where his law agent has been directly concerned in the carrying out of the very transaction which is the subject matter of enquiry". In the particular case the court refused a motion to open up a confidential envelope which had been recovered by specification in a civil action.

The principle was taken slightly further by Lord Macfadyen in the case of Conoco v. The Commercial Law Practice in 1996. In that case the Commercial Law Practice had been consulted by a client who had asked them to write to Conoco without mentioning his name but advising them that he was aware of circumstances in which they had made substantial overpayments on a contract which he would be willing to provide further information about in return for a proportion of what was recovered.

Instead of responding positively to this invitation, Conoco brought a Petition under the Administration of Justice Act to require the solicitors to disclose their client's name and address, which was granted. Lord Macfadyen stated "The public policy consideration which underlies the fraud exception may be capable of extension to a situation in which a party and his solicitor, not themselves either guilty of fraud or involved in carrying out a fraudulent transaction, are involved in a transaction the purpose of which is to derive for the client benefit from his knowledge of a fraud committed by another party".

If you are presented with a Production Order by the police you should pay close attention to what is called for in such an order and only deliver that.  If asked to give a statement simply confirming that this is the file/these are the papers called for in the Order you should do so.

If you are asked to give a statement to the Police or the Procurator Fiscal in relation to a matter where the information sought is not already in the public domain (for instance having been disclosed in open court, or published in a public register) but is actually confidential, the Professional Practice Committee's view is that you should offer to be precognosced on oath before the sheriff.  If you answer a question on the direction of the court you would not be subject to a complaint of breach of confidentiality, as the matter is fundamentally one of law not of practice. In 1999 The High Court of Justiciary refused a Bill of Suspension in the case of Kelly and Sarwar where the solicitor appealed against a citation to give a precognition on oath.

You should not hand over your file or papers to the Police or the Fiscal unless they have obtained a warrant or a Production Order.  If the authorities complain about the difficulty in obtaining an order, then a fortiori you should not hand over your papers voluntarily.

If you are cited to give evidence at a trial you must appear but again should follow the judge's directions. If you are required to answer a question you should do so. Whether the evidence is admissible is a matter for the court to determine and might form grounds of appeal.

4. Statement to other solicitors

You may be asked to give a statement to other solicitors. If they are now instructed by your former client you can treat the request as a waiver of confidentiality by the client and give a statement. You can also hand over copies of documents, but should seek a written mandate from the former client before handing over original documents.

If the request comes from a solicitor acting for your former client's opponent in a civil matter you should decline the request - even if the allegation is that you did not give proper advice to your former client - unless and until you either have the former client's authority to do so, preferably in writing, or have been ordered by the court to do so e.g. having been cited to give evidence and required by the judge to answer the question. If you are a Crown witness in a criminal case and are asked to give a statement to the solicitor acting for a party other than your former client you can confirm what you have told the police or the Procurator Fiscal but cannot do more than that without your client's authority.

5. Crime about to be committed

You may receive information from your client about a crime which he is threatening to commit. In those circumstances the client is not entitled to the privilege of confidentiality and as stated in the rule you would be quite entitled, and some would say obliged, to draw the circumstances to the attention of the authorities. For example, if Thomas Hamilton - who had consulted a number of different solicitors about different matters - had advised any of them of his intentions at Dunblane primary school, those solicitors would have been duty bound to alert the authorities so as to prevent the tragic events from happening.

6. Insolvent client

You may find yourself asked to produce information to a trustee in sequestration, receiver, administrator or a liquidator. If you acted for the bankrupt or the company which has gone into administration or liquidation, the trustee, administrator or liquidator steps into the client's shoes and is entitled to all the papers which you hold for the client - although in a sequestration only so far as relating to the bankrupt's financial affairs. You do not need to take your client's instructions on whether such information should be given.

You should however be careful to separate out papers in relation to individual directors or shareholders where you were acting for a company and only deliver those papers in relation to your acting for the company - unless of course the same person has been appointed trustee to the individual directors or shareholders.

7. Statutory Requirements

Some statutes, most notably the Proceeds of Crime Act 2002, require solicitors and others to breach confidentiality. If such a statutory obligation exists or the person seeking the information has statutory authority for the request, you should comply with it.

8. Civil Court Matters

Finally if you are cited as a witness in a civil case you must attend court and can answer questions posed by the agent or advocate acting for your client or former client. However, if you feel that the answer to a question from the person acting for any other party would breach client confidentiality you should seek directions from the judge and follow those. If you are served with a Specification of Documents or similar order you should obtemper comply with it but should put the documents in a "Confidential" envelope if the court order was not granted on your own client's motion. You should be given an opportunity to be heard on whether the Confidential envelope should be opened up, in which case you can refer the Court to the Micosta case (see para 3 above).

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