A partner's human error led to a City firm inadvertently working for clients on both sides of a 'passing off' dispute between two banks, a High Court judgment has revealed. However in The Bank of London Group Limited v Simmons & Simmons LLP, the court dismissed an application for an injunction by a start-up bank stating that there was no reason to suspect a breach of confidentiality. 

The court heard that The Bank of London Group, licensed in 2021, engaged Simmons & Simmons to review and advise on draft service agreements, including with the provider of its patented technology. The work was done with no formal engagement letter for a fee of £5,435 (plus VAT). 

'Unbeknown at that time to the defendant's team dealing with the claimant, the defendant also had a long standing relationship with another client, Bank of London and The Middle East plc (BLME),' Stuart Isaacs KC, sitting as a deputy judge in the High Court, observed. On behalf of that client, the firm had written to the start-up threatening a passing-off action over the use of the name 'Bank of London'. 

The firm found itself in this position because of a human error in a conflicts check by Simmons partner Alexander Ainley, the judge ruled. 

In its court action, the start-up bank initially sought an injunction to restrain the firm from continuing to act for BLME on the passing off claim and from divulging any confidential information. However the first demand was later dropped. 

Ruling on the remaining matters, the judge found that any criticism of the firm's approach to the handling of confidential information could not be sustained. 'No challenge is made to the integrity of the solicitors at the defendant,' he said. He found 'no real risk' that confidential information would be disclosed. 

The judge said he had 'exceptionally' granted an application for the hearing to be held in private 'in view of the alleged confidential nature of the information in the defendant’s possession and the disruption and consumption of court time in a hearing fixed for only one day which would have inevitably occurred had it been necessary repeatedly to clear the court'. 

Commenting on the ruling, Charles Hollander KC of Brick Court Chambers, who appeared for the law firm, said there have been 'few reported cases of conflicts of interest involving solicitors, still fewer where the solicitor has succeeded'. However this 'is one such case'. 

A spokesperson for Simmons & Simmons said: 'We take client confidentiality very seriously and have well-established procedures and policies in place to ensure security and confidentiality at all times. We were always confident that the judge would reject the claim from Bank of London.'

 

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