Ecclesiastical Insurance Office Plc Against Lady Iam Hazel Virginia Whitehouse-grant-christ
| Jurisdiction | Scotland |
| Judge | Lord McGhie,Lord Bracadale,Lord Malcolm |
| Judgment Date | 26 May 2017 |
| Neutral Citation | [2017] CSIH 33 |
| Court | Court of Session |
| Date | 26 May 2017 |
| Published date | 26 May 2017 |
| Docket Number | A2852/00 |
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2017] CSIH 33
A2852/00
Lord Bracadale
Lord Malcolm
Lord McGhie
OPINION OF LORD BRACADALE
in the cause
by
ECCLESIASTICAL INSURANCE OFFICE PLC
Pursuers/Respondents
against
LADY IAM HAZEL VIRGINIA WHITEHOUSE-GRANT-CHRIST
Defender/Reclaimer
Pursuers/Respondents: Ellis QC; BLM Law
Defender/Reclaimer: Party
26 May 2017
[1] I am grateful to Lord McGhie, whose opinion I have had the advantage of reading in draft, for fully setting out the background, the submissions of parties and an analysis of the case law. I agree with him that, largely for the reasons given by him, the motion should be refused. As Lord Malcolm has come to a different view I shall briefly state my reasons for refusing the motion.
[2] This case has a long history in the Court of Session. It came before this court on a particular issue which had been raised by the defender and reclaimer at an earlier hearing. This related to whether the solicitors recently instructed by the pursuers and respondents could continue to act for them. In order to understand how this issue arose it is necessary to set out a little of the history of the case. In February 2000 the house of the defender went on fire. She made a claim for indemnity under a policy of insurance with the pursuers. In response, the pursuers raised an action seeking to avoid the policy on the ground that it had been obtained by non-disclosure of material facts and they concluded for its reduction. The summons was served on the defender in October 2000. She consulted Mr George Moore of HBM Sayers. Her dealings with Mr Moore lasted about six weeks; she then instructed other solicitors. In October 2001 defences were allowed to be received late. By March 2002 the defender had become a party litigant, as she has been ever since. On 31 October 2002, on the motion of the defender, the cause was sisted. Nine years later, in March 2012, the sist was recalled on the motion of the defender, who at that stage raised a counterclaim.
[3] On 19 February 2015, after a debate on the procedure roll, the Lord Ordinary (Boyd of Duncansby) found in favour of the pursuers and granted declarator that the pursuers were entitled to avoid the policy on the ground that it had been obtained by non-disclosure of material facts. He dismissed the counterclaim. The defender reclaimed. On 2 March 2016 an Extra Division (Lady Paton, Lord Drummond Young and Lord McGhie) recalled the interlocutor of the Lord Ordinary, allowed a proof before answer, sisted the counterclaim until the conclusion of the substantive case and appointed the case to come out by order before the same bench to hear submissions on a particular issue which might have an impact on proof. The opinion of the court was delivered by Lord McGhie.
[4] The by order hearing was set down to take place on 22 September 2016. On that date the defender, by an oral motion made at the bar, supported by written submissions, raised an issue in respect that the pursuers had recently instructed new solicitors, BLM. The minute of proceedings records that the court, having briefly looked at the submissions of the defender, considered that the defender sought both BLM and senior counsel to withdraw from acting for the pursuers, failing which interdict against them on the ground of conflict of interest. The motion was opposed. The court continued consideration of the motion to a separate hearing. It was this matter that came before this court.
[5] The background to the defender’s motion was that in May 2014, as more fully explained by Lord McGhie, as a result of merger, HBM Sayers became part of BLM, of which Mr Moore became a consultant. The question therefore arose whether BLM could now act for the pursuers in the case, Mr Moore having acted for the defender at an earlier stage.
[6] Shortly before the hearing before this court, the pursuers lodged a minute of abandonment and a minute of admission of partial liability which, if allowed, will have the effect that, when the case returns to the Outer House, the remaining live issues will relate to quantum and the counter-claim.
[7] The extent of the involvement of Mr Moore in the case emerged from various materials lodged by the defender. In 2000, after the summons was served, the defender consulted Mr Moore and he acted for her in the very early stages of the process. She spoke to him on the telephone and on 26 October 2000 by fax sent to him a number of documents, raising some questions with him. On 30 October 2000 Mr Moore wrote to the defender. He acknowledged receipt of the papers. He explained that the next stage would be to arrange a meeting so that he could go over of the papers with the defender, prepare a statement for the purposes of legal aid and complete a legal aid application. He explained that he had agreed to act for her to the extent of providing preliminary advice, entering appearance in connection with the summons, sisting the action and lodging the legal aid application. On 2 November 2000 the defender had a meeting with Mr Moore. On 6 November 2000 Mr Moore wrote to the defender referring to their recent meeting. He enclosed the statement that he had prepared and advised the defender that he was preparing the legal aid papers.
[8] On 9 November 2000 the summons called. The defender entered appearance and on 15 November 2000 the cause was sisted on the unopposed motion of the defender in order to allow her to apply for legal aid. It appears that these two steps were taken by the defender herself rather than Mr Moore. It is not clear whether any application for legal aid was made. In a letter dated 6 December 2000 Mr Moore explained to the defender the basis of the pursuers' case against her. In the course of the following week the defender parted company with Mr Moore and instructed new solicitors. It appears that she was represented by these solicitors until March 2002. After trying unsuccessfully to instruct other solicitors, she again approached Mr Moore. By letter dated 20 March 2002, Mr Moore indicated that he was not prepared to re-involve himself in the case. In these circumstances on 22 March 2002 when the case next called the defender appeared on her own behalf and has continued to do so ever since. As already noted, on 31 October 2002 the case was again sisted and remained so until March 2012.
[9] At the hearing before this court both the pursuers and the defender presented arguments as to whether a solicitor can act against a former client based on disclosure of relevant confidential information, relying on the decision of the House of Lords in Bolkiah v KPMG [1999] 2 AC 222 and related cases. While the case was at avizandum, the court noted the wider jurisprudence of other jurisdictions, including Australia, New Zealand and Canada as well as the United States of America. As a result, we invited further written submissions from the parties and both the pursuers and the defender made written submissions in response.
[10] It is clear from the authorities that in a free society there is a legitimate public interest in the freedom of a person to instruct a solicitor of his or her choosing and for a solicitor to obtain instructions from any member of the public. There is also a public interest in the protection of a person who has instructed, and placed trust in, a solicitor. These interests may in certain circumstances be the subject of friction, particularly where the issue involves a solicitor “changing sides”. I agree with Lord McGhie that confidentiality emerges as the dominant consideration. The test is set out by Lord Millett in Bolkiah at p 235D-E:
“Accordingly, it is incumbent on a plaintiff who seeks to restrain his former solicitor from acting in a matter for another client to establish (i) that the solicitor is in possession of information which his confidential to him and to the disclosure of which he has not consented and (ii) that the information is or may be relevant to the new matter in which the interest of the other client is or may be adverse to his own. Although the burden of proof is on the plaintiff, it is not a heavy one”:
This is described in the cases as “relevant confidential information”. While BLM assert that they are not in possession of any confidential material, there is no suggestion of a Chinese wall being in place, and the question arises whether Mr Moore is in possession of any relevant confidential information which might be imparted to the solicitor or team of solicitors in BLM acting for the pursuers. I am satisfied that he is not. The defender herself placed before the court a substantial amount of material relating to her instruction of Mr Moore. That material was made available by her to the pursuers and their agents. As more fully explained by Lord McGhie, Mr Moore’s initial role was a limited one and there is no reason to think that he had any involvement in matters relating to quantum. I agree with Lord McGhie that it is not possible to identify by inference any further material which the defender might have been expected to have provided to Mr Moore in the expectation of it remaining confidential. In the end of the day, the defender relied on the document which she was permitted to lodge in a sealed envelope. I agree with Lord McGhie that it adds nothing of significance to material already set out in the pleadings and that neither the material already placed before the court, nor the precognition in the sealed envelope, raise any risk that information imparted in confidence by the defender to Mr Moore may be used to her disadvantage. With the greatest of respect, I am unable to share Lord Malcolm’s concern as to risk in relation to confidential material.
[11] It is common ground that the court has an inherent power supervise its officers and take action where appropriate. In Hepburn v Royal Alexandria Hospital NHS Trust 2011 SC 20 Lord Reed at paragraph [47] described the general inherent...
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