Q: We acted for Client A years ago. Client B now wants us to act against them. We know something from the old file that might help Client B, but we obviously cannot disclose it. Can we put up an information barrier and carry on?
A: Be very careful. This is one of those issues that sounds manageable until you follow it through properly.
Solicitors owe a continuing duty of confidentiality to former clients. If you obtained confidential information from Client A, that duty does not disappear when the retainer ends. At the same time, you owe Client B a duty to disclose information that is material to their matter. In broad terms, material information is information the client would reasonably want to know in order to make decisions or progress the matter.
The SRA’s position is that confidentiality owed to one client takes precedence over the duty of disclosure to another. But that does not solve the problem. If you cannot tell Client B something material because it belongs to Client A, you may not be able to act for Client B in their best interests.
Information barriers are not magic
The SRA sets a high threshold for ‘effective measures’. The measures must remove the real risk of disclosure, not merely reduce it. In a large firm, that might mean separate teams, no overlap in fee earners or support staff, locked-down files, restricted document access and clear internal controls.
Even then, the question is not simply whether Client A’s information can be protected. You also have to ask whether Client B can be properly advised without the information being disclosed. If the answer is no, the firm should not act for Client B unless informed consent is available and it is appropriate to rely on it.
In smaller firms, the practical risk of inadvertent disclosure can be much harder to manage. Casual conversations, misdirected emails, file notes, shared assistants and general knowledge held by individuals can all defeat a paper barrier.
Consent may help, but do not assume it will
Client A may consent to the firm acting, and in some cases may also consent to disclosure of the material information. But consent must be informed, properly documented and freely given. In an adversarial situation, that may be unrealistic.
There is also a danger in trying to test what Client B already knows. Probing questions can themselves disclose or hint at the confidential information. If the confidential information is material, and you cannot disclose it, the safest answer will often be to decline the instruction.
Examples that should set alarm bells ringing
A family team is asked to advise one spouse in divorce proceedings, but the firm previously advised the other spouse on an employment exit package. Details of the settlement and the circumstances of dismissal may be highly relevant to financial negotiations.
A neighbour asks for advice about a right-of-way dispute, but the firm previously acted on the purchase of the affected property and holds historic title and usage information.
A new joiner recognises that a Will being relied on is not the latest Will, because of confidential knowledge gained at their previous firm. They may not be able to share the details, but they should escalate internally and warn that the firm may need to step away.
Practical controls
1. Get enough information at intake to run meaningful checks. Names alone are not enough. Property addresses, business names, assets, counterparties and connected parties can all yield results.
2. Build conflicts checking beyond names. The subject matter of the instruction can create the link, not just the client identity.
3. Escalate early. Potential confidentiality/disclosure conflicts should go to the COLP, compliance team or conflicts committee before the retainer is accepted.
4. Record the reasoning. Note what information may be held, why it may or may not be material, whether safeguards are realistic, and why the firm can or cannot act.
5. Train for the practical risks. The issue is not only what is stored on the file. It is also what people know, remember and may inadvertently disclose.
Bottom line: where the firm holds confidential information for one client that is material to another client’s matter, and consent or genuinely effective safeguards are not available, the firm should usually decline to act.
This is not legal advice. If you have a question you would like us to answer in this section, feel free to send it to info@jblcompliance.com.
