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Confidentiality v Open Justice in a Professional Negligence context

ABC v Shulmans LLP [2019] EWHC 2458 (Comm)

A Claimant, suing his previous solicitor for professional negligence and claiming damages of £4 million, has lost his opportunity to do so anonymously. 

Nadia Omar and John Bennett consider the recent decision in  ABC v Shulmans LLP [2019] EWHC 2458 (Comm), in which the Claimant applied for anonymity orders in respect of his claim for professional negligence against his former solicitors, Shulmans LLP ('Shulmans') who had acted on his behalf in connection with an employment dispute.

 

Background

The Claimant is seeking damages from Shulmans for alleged professional negligence in the conduct of certain legal proceedings commenced in 2014 and 2015 arising out of a dispute between the Claimant and his former corporate employer. The Claimant alleges that Shulmans gave negligent advice, or failed to give proper advice, which led to the Claimant being compelled to settle the claim for a fraction of his true entitlements.

At a very early stage, before proceedings had been served, anonymity orders were sought by the Claimant on the basis that the underlying claim had been settled with a standard confidentiality provision in the Deed of Settlement requiring confidentiality in respect of matters in the underlying dispute. The Claimant argued that by subsequently bringing a claim for professional negligence against Shulmans he would risk breaching the agreement and that to protect all of the parties, the Court should agree to hold private hearings, anonymise the names of the parties and set reporting restrictions. However, it was of consequence that he had chosen not to add the other parties to the Settlement Deed as Respondents to the Application. The Application was said to be made in accordance with CPR Parts 5 and 39, Section 11 of the Contempt of Court Act 1981 and Articles 8 and 10 of the ECHR.

Decision

The Claimant's Application was refused.

The Deputy Judge said that although the Application was made by reference to upholding the Claimant's Article 8 Right to Privacy, he read the evidence in support of the Application as indicating that the Claimant's real concern was the fear that news of the proceedings might leak to his former employer with the result that the employer would make a claim against the Claimant for breach of the confidentiality provision in the Settlement Deed. He seemed to agree with the Defendant's leading counsel who described the Application as "a wolf in sheep's clothing" which sought very far reaching relief. The Deputy Judge queried whether the Claimant was seeking to prohibit the Defendant from contacting the owner of the company to provide a witness statement but the Claimant confirmed that he was not seeking such an order.  

The Deputy Judge dealt first with the principle of open justice, which he said was not simply a gateway to a balancing exercise between public interest and countervailing rights, but instead a fundamental aspect of the judicial system.  He did not accept the Claimant's submission that the starting point should be the "interest" that a member of the public might have in any particular fact, he did not even consider it to be a relevant question. 

The Deputy Judge then turned to the four circumstances which were said to give rise to the Claimant's privacy rights, used to support the Application, the most straightforward of which was an element of the case concerning the Claimant's medical history. The Deputy Judge dealt with this swiftly by ordering redactions to any references to matters concerned with the Claimant's medical history as a temporary measure until the first CMC.  

The main circumstance relied on was the confidentiality provision in the Settlement Deed. The Claimant wished to rely on the provisions of the Deed to advance his litigation even if it meant breaching the agreement, but conversely sought to do so secretly so as not to alert his employer to the breach. The Deputy Judge found these positions to be inconsistent and apart from the medical records there was nothing intrinsically personal in the information the Claimant sought to protect. The Claimant argued that he had the benefit of a confidential agreement and that he should not have to forego that confidentiality to bring his claim. The Deputy Judge asked why not and decided that the mere fact that the Deed contained a confidentiality provision from which the Claimant would like to benefit did not justify the relief sought. 

Nor did the Deputy Judge agree with the Claimant's third circumstance, that the confidentiality provision was contained in an agreement which settled legal proceedings, and that it is the policy of the law to encourage settlements by agreement. 

The final circumstance relied on by the Claimant was the likelihood that the claim would involve the disclosure of documents otherwise subject to legal professional privilege.  All professional negligence claims against solicitors contain information which is confidential, but the Deputy Judge held that the limited waiver did not justify the relief sought by the Claimant.  Moreover, there were no overwhelming circumstances which justified the privacy as in Eurasion Natural Resources Corp v Dechert LLP [2016] where confidentiality was sought in the context of a criminal investigation by the Serious Fraud Office. The Deputy Judge agreed with leading counsel for the Defendant that it was not normal practice in claims against solicitors to impose privacy orders merely because the subject matter may include privileged material.   

The Defendant's leading counsel submitted that the order sought by the Claimant was unprecedented in a typical solicitors' negligence action and the Claimant could cite no cases where a Court had made similar orders in similar circumstances.

Although the Application was refused, the Deputy Judge nonetheless retained the Claimant's anonymity in his ruling as he deemed it “unnecessary” to use the names for the resolution of the issues before him and pending the first CMC.

Comment

The decision reinforces the proposition that judicial protection for confidential information must be justified and will depend on the particular circumstances of a case.  Any derogations from open justice should be sparingly permitted and narrowly used and a "typical solicitors' negligence action" does not seem to be the sort of case where confidentiality is likely to be ordered, save in very exceptional circumstances. 

Contact

For more information please contact, Nadia Omar, Solicitor nadia.omar@dwf.law or John Bennett, Partner,  John.Bennett@dwf.law.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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