High Court prevents in-house lawyer acting against former employer due to risk of subconscious use of confidential information

The High Court has granted an injunction preventing an in-house lawyer from acting in proceedings adverse to her former employer: Western Avenue Properties Ltd v Soni [2017] EWHC 2650 (QB).

The judge accepted that the defendant was well aware of her professional responsibility of continuing confidentiality and was unlikely to have any conscious intention to breach it. However, that did not avoid or reduce the risk of her subconsciously using the claimants’ confidential information. An injunction was therefore appropriate.

It was common ground between the parties that the principles established in Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 apply to in-house lawyers as well as those in private practice. Accordingly, where an in-house lawyer was in possession of material confidential information of a former employer, an injunction would be granted unless he or she could establish that there was no real risk of disclosure or misuse.

This is in contrast to Generics (UK) Limited v Yeda Research & Development Co Ltd [2012] EWCA Civ 726 (considered here) in which the Court of Appeal expressed uncertainty as to whether the Bolkiah principles applied in the in-house context, or whether it was up to the former employer to satisfy the court that an injunction was appropriate – though it did not have to decide the point as on the facts of that case there was no real risk of disclosure. Yeda was not referred to in the judgment in the present case. Continue reading

A litigator’s yearbook: 2012 (England and Wales)

At this time of year it is traditional to look back over the past 12 months and try to sum up what the year has had to offer. We thought it might be helpful to do the same from a litigator's perspective, and so we have set out below an outline of some of the key developments from 2012 on topics of interest to litigators.

So whether you've been following developments closely throughout the year and just want a quick refresher, or you're a year behind and need help catching up, we hope there will be something of interest for you below. Continue reading

ECJ rules in-house lawyers cannot represent their client companies before EU courts

The Court of Justice of the European Union (ECJ) has ruled that in-house lawyers cannot represent their client companies in proceedings before the EU courts (i.e. the ECJ and the General Court, previously known as the Court of First Instance): Prezes Urzedu Komunikacji Elekronicznej and Republic of Poland v European Commission C-422/11 and C-423/11. Continue reading

Court of Appeal considers confidentiality obligations of in-house lawyers

The Court of Appeal has considered whether and in what circumstances a former employed lawyer will be restrained from acting adverse to a former employer in order to protect that former employer’s confidential information: Generics (UK) Limited v Yeda Research & Development Co Ltd [2012] EWCA Civ 726.

The court held unanimously that, on the facts of this case, there was no real risk of disclosure of the alleged confidential information and therefore the injunction that had been granted at first instance would be discharged. However, the court was divided over the applicable principles, and in particular whether an in-house lawyer who was in possession of material confidential information of a former employer would be restrained from acting unless he or she could establish that there was no real risk of disclosure or misuse, as would be the case for a private practice lawyer under the principles established in Prince Jefri Bolkiah v KPMG [1999] 2 AC 222. Two of the three judges expressed the view (though one described it as “tentative at best”) that the Bolkiah principles did not apply to this situation and it would be up to the former employer to satisfy the court that an injunction was appropriate. Continue reading

Privilege after Akzo – a checklist for in-house lawyers

The European Court of Justice decision in Akzo confirms that, for the purposes of EU law, legal professional privilege does not apply to communications between in-house lawyers and their clients (see post).

The decision affects legal professional privilege only in the context of EU competition law investigations led by the European Commission. The English rules of privilege, which apply in respect of litigation in the English courts, are unaffected. Accordingly, under English law, in-house lawyers continue to enjoy the same protection as external lawyers so long as they are acting in a legal rather than an executive capacity.

The briefing below by our EU Competition group reminds clients of the rules governing privilege at EU level and sets out practical steps that can be taken to maximise privilege in the event that your organisation is subject to a competition investigation by the European Commission. Continue reading

European Court of Justice confirms that privilege does not apply to in-house lawyers under EU competition law

The European Court of Justice (ECJ) has today handed down judgment in the Akzo privilege case, confirming that legal professional privilege does not apply to protect communications between parties and their in-house lawyers from disclosure during competition investigations by the European Commission (Akzo Nobel Chemicals Limited and Akcros Chemicals Limited v Commission of the European Communities).

Although the decision will not come as a surprise, following as it does the Advocate General’s opinion published on 29 April 2010, in-house lawyers and the organisations which employ them will no doubt be disappointed by the court’s ruling.

The decision does not affect the scope of privilege as a matter of English law, under which in-house lawyers continue to enjoy the same protection as external lawyers so long as they are acting in their capacity as a lawyer and not an executive. Continue reading