Balancing exercise
46.Lord Millett ruled in Bolkiah that the assessment was not a balancing exercise. The impact on the solicitor’s current client of an order restraining the solicitor from acting was not relevant (see above). This was referred to by Sir Robin Jacob in Generics (UK) Ltd v Yeda Research & Development Co Ltd [2012] EWCA Civ 726; [2013] FSR 13, in a passage to which my attention was drawn: “[15] It is clear that if Bolkiah principles apply there is no question of any balancing, see per Lord Millett at p.237B. The interests of the former client prevail. But if interlocutory injunction principles apply, then the potential harm to the defendant if an injunction is ‘wrongly’ granted may potentially come into play. [16] In the end this point did not matter, for even on interlocutory injunction applications (and it should not be forgotten that Bolkiah itself was an interlocutory injunction case) the balance of convenience matters little if the reality is that the decision will determine the matter finally. So I say no more about ‘balancing’.” 47.As Sir Robin Jacob said, the effect of a Bolkiah order (and indeed the one sought here) is final. It can be likened to a quia timet action for breach of confidence. In such an action, where a risk of breach of confidence is shown the court will grant a final injunction without being concerned with its effect on the defendant. The defendant is threatening to act unlawfully and must take the consequences. 48.However, the final injunction following such an action would go no further than restraining the defendant from acting in breach of confidence, possibly also prohibiting specific acts which would be in breach. A Bolkiah order (and the order sought here) is not the same in that it may in addition have a significant and negative impact on a party who is not obviously threatening to do anything unlawful: the current client of the solicitor. 49.Lord Millett’s reason for rejecting a balancing exercise was different (at 237B-F): “I would also reject the approach taken by the New Zealand Court of Appeal in Russell McVeagh McKenzie Bartleet & Co. v. Tower Corporation, 25 August 1998 and adopted by the Court of Appeal in the present case. In my opinion the balancing exercise which was undertaken was inappropriate. This is not because the considerations which were thought to militate against the granting of injunctive relief were irrelevant: far from it. It is clearly relevant that Prince Jefri retained KPMG in the knowledge that they were the B.I.A.'s auditors, and that the B.I.A. would be put to inconvenience and expense if his retainer were to prevent it from employing KPMG's services in future. But such considerations are relevant to a different question: whether in the circumstances Prince Jefri must be taken to have consented to KPMG's undertaking the further assignment for the B.I.A. For the reasons I have given, he must be taken to have consented to the acceptance by KPMG of the instructions given to Mr. Harrison in June, for these were a natural extension of the audit. But Project Gemma was a very different matter. Absent such consent, the considerations which the Court of Appeal took into account cannot in my opinion affect the nature and extent of KPMG's duty to protect confidentiality or convert it into a duty to do no more than take reasonable steps to protect it. This would run counter to the fundamental principle of equity that a fiduciary may not put his own interest or those of another client before those of his principal. In my view no solicitor should, without the consent of his former client, accept instructions unless, viewed objectively, his doing so will not increase the risk that information which is confidential to the former client may come into the possession of a party with an adverse interest.” 50.Thus, there were two strands to Lord Millett’s reasoning. First, the impact on the new client of an order restraining the solicitor from acting is relevant only to whether the former client consented to the acceptance by the solicitor of the relevant instructions from the new client. Secondly, a fiduciary, the solicitor, must not put either his own interests or those of another client before the interests of his former client. 51.It seems to me that where there is no relevant fiduciary relationship, Lord Millett’s reason for not taking into account the impact of the order on the current client no longer applies. In the present case I must therefore consider any likely impact of the order sought on the current client.