Armstrong v Berrymans Lace Mawer LLB (t/a BLM) & Anor

This is the hearing of an issue (the “Issue”) directed for determination by ICCJ Jones on 8 July 2019, namely “whether or not the Joint Retainer files (defined in the parties’ evidence) should be disclosed to HJI and / or to Hugh James”. The Issue arises in the context of an application issued on 11 January 2019 (the “Application”), pursuant to section 234 and section 236 of the Insolvency Act 1986 (the “1986 Act”), by the Applicants, the joint administrators (the “Administrators”) of Transform Medical Group (CS) Ltd (“Transform”) seeking an order against the First Respondents,

On 28 June 2019, the Application came before ICCJ Jones and he made an order, sealed on 8 July 2019 (the “July Order”), joining Travelers Insurance Company Ltd (“Travelers”) as a party and requiring “subject to (a) the Undertakings and (b) the “sifting” process set out below, the Joint Retainer Files shall be delivered up to the Applicants by the Respondent by 4.30pm on 27 September 2019” (the “Deadline”). He further ordered “the Respondent is to use its best endeavours to deliver up documents from the Joint Retainer files that have been through the “sifting” process including the monitoring to the Applicants every three weeks” (the “Ongoing Obligation”). The effect was to determine the Application, save for the Issue and costs.

Notwithstanding the July Order, none of the Joint Retainer files (or any of their contents) were provided to the Administrators. On 17 September 2019, ICCJ Mullen made an Order by consent extending the Deadline to 4.30 pm on 27 December 2019.

On 4 December 2019, Travelers made an application for a stay of the disclosure procedure set out in the July Order, alternatively an extension of time (“Travelers’ Application”).

On 10 January 2020, Deputy ICCJ Shaffer made an Order on the Travelers’

At the conclusion of the hearing before me, on 7 February 2020, I made an Order further extending the Deadline to 6 March 2020 and lifting the suspension of the Ongoing Obligation. That was followed by a further short hearing before me on 28 February 2020, when, upon certain undertakings being given by BLM, I extended the Deadline once again to 13 March 2020.

The evidence before me consisted of the following:

Despite the objection of Travelers to the late service of Locke 2 and Harvey 1, I permitted both witness statements to be adduced in evidence, giving Travelers a right of response to Harvey 1, if necessary, Keating 2 having already responded to Locke 2. No further evidence was produced.

At the hearing, the Administrators were represented by Christopher Boardman and

Transform carried on business as one of the UK’s leading cosmetic surgeries, with 25 clinics across the UK, which provided (amongst other things), breast implants, manufactured by a French company, Poly Implant Prothese (“PIP”). In 2010, Transform faced a large number of claims by female claimants in respect of allegedly faulty PIP breast implants, who claimed that there was a failure to use medical grade silicone in the manufacturing process, causing the implants to rupture. Proceedings were subsequently issued and on 17 April 2012 a group litigation order (“GLO”) was made, with Hugh James LLP (“Hugh James”) acting as lead solicitors for the claimants. Each claimant was also represented by their own solicitors. Hugh James and the other solicitors acted on the basis of conditional fee agreements (“CFAs”).

Travelers provided product liability insurance to Transform over the period 31 March 2007 to 30 March 2011, which covered some, but not all, of the claims. Transform participated in the GLO. Transform and Travelers jointly engaged BLM to act on their behalf in relation to the insured claims. In addition, BLM was retained by Transform alone in relation to the uninsured claims and by Travelers alone in relation to additional matters. In June 2014, Transform voluntarily disclosed to the claimants in the GLO the extent of its insurance cover, despite an earlier unsuccessful application by the claimants to obtain such disclosure from Transform. It was apparent by then that, without insurance, Transform would be unlikely to have the resources to pay compensation or costs to successful uninsured claimants.

The insured claims were settled in 2015 and Transform then entered into administration, the Administrators being appointed on 30 June 2015. The uninsured claimants (to whom I will refer to hereafter as the “Claimants”) obtained summary judgments against Transform on 20 October 2016. One effect of pursuing Transform to judgment was to trigger the CFAs under which the Claimants’ solicitors were acting, thereby exposing the Claimants to the liability to pay their own solicitors’ costs.

The Claimants then sought a third party costs order under section 51 of the Senior

On 11 April 2018 Charles Russell Speechlys (“CRS”), acting on behalf of the Administrators, wrote to BLM stating: “We are aware that your firm acted for [Transform] in relation to the PIP Breast Implant Litigation. These files are the property of [Transform] and accordingly we would be grateful if you would deliver the files to us as soon as possible.” They also relied upon section 234 of the Insolvency Act

On 9 May 2018, BLM wrote to CRS stating: “Where there has been a joint retainer I believe that we are still required to obtain the consent of the other client i.e. the insurer – see Hamilton and Dixon Group Sipp v Hastings and Company (Solicitors)(sued as a firm) [2014] NICh 27. That consent is being obtained and I believe will not be withheld, whereupon your client will be entitled to a copy of the documents to which your client is entitled at their expense. You will appreciate that those papers which are confidential to Travelers or BLM will have to be removed.”

It is important to remember that there were three categories of files held by BLM relating to the PIP Breast Implant Litigation (the “PIP Litigation”):

In an email sent on 14 May 2018, BLM stated that Travelers agreed that the Administrators were entitled to “a copy of Transform’s file under the joint retainer and also their own file under the separate retainer, all at their cost as set out below.” The outstanding issue of costs resulted in the Joint Retainer files not being handed over. That point was later abandoned by BLM, which agreed to bear its own costs on the basis that its solicitors, Mills & Reeve (“M&R”), performed the sifting exercise.

On 30 August 2018 the Administrators entered into an agreement and assignment (the “Assignment”) with Hugh James Involegal LLP (“HJI”) (which is wholly owned by the equity partners of Hugh James, but operates as a distinct legal practice, with its own

Pursuant to clause 2(i), in respect of any sums recovered from BLM and / or counsel the Administrators are entitled to £250,000 in respect of any “Net Recoveries” (as defined therein) over £250,000 and up to £5 million, plus 5% of any Net Recoveries over £5 million. The balance of the Net Recoveries is to be divided up, pursuant to the terms of a Declaration of Trust, amongst the Claimants and Hugh James and the Administrators on behalf of Transform.

Additionally, under the terms of a Client Agreement, in consideration of HJI agreeing that the Claimant shall be one of the Claimants, who are beneficiaries under clause 1 of the Declaration of Trust, each Claimant agreed that when she has recovered against BLM and / or counsel in full, she will not claim in the administration of Transform.

Therefore, by 30 August 2018, the Assignment having been entered into, it was clear to the Administrators that, pursuant to clause 1(ii) thereof, any relevant documents in the Administrators’ possession and control would be disclosed to Hugh James as HJI’s solicitors. Further, the Administrators must at that time also have been aware that Travelers, as Transform’s insurer, had been indirectly in litigation with Hugh James, acting as lead solicitor for the Claimants in the GLO and in direct litigation in relation to the section 51 costs application, such an application having been first intimated in December 2015.

On 6 September 2018, Hugh James wrote to BLM, as solicitors acting for HJI, notifying it of the Assignment and stating that HJI intended to sue BLM for negligence in having advised Transform that the insurance position should not be disclosed to the Claimants. In very large part, the sums now sought to be recovered against BLM are made up of the Claimants’ claim for costs in the unsuccessful section 51 costs application. It was therefore clear to BLM at that stage that HJI had taken an Assignment of the Assigned Claims and Hugh James was acting for HJI.

On 14 November 2018, BLM wrote to CRS, seeking confirmation of the purpose of the request for the files and asking what right they had to request the same “where the

On 20 November 2018, CRS responded, stating the Assignment was irrelevant to the request for delivery up of the files pursuant to section 234 of the Insolvency Act 1986. “Irrespective of the assignment, the Administrators are under a duty to investigate any potential actions that [Transform] has against third parties generally… Privilege in the file rests with client of your firm, [Transform]. Given that there was a joint retainer there can be no privilege. There can therefore be no objection to providing the entirety of the file to [Transform] (see Walker Morris v Khalastchi [2001] 1B.C.L.C). As the file

On 29 November 2018, BLM wrote to CRS stating: “…we are still waiting for

Stated shortly, thereafter the matter was not resolved, and on 11 January 2019 the Application was issued by the Administrators against BLM. It was not served until 29 January 2019. Armstrong 1 was served in support of the Application. Reference was made to the Assignment at paragraph 18, but a copy was not exhibited and Mr Armstrong did not refer to the fact that, under the terms of the Assignment, Hugh James had been instructed by HJI to act in relation to the Assigned Claims, although at paragraph 7 reference was made to the fact that Hugh James acted on behalf of the

On 7 February 2019, DWF LLP (“DWF”), solicitors for Travelers wrote to

Matters were not resolved and on 14 February 2019 Travelers made an application to intervene. It was supported by Whittaker 1. In it, Mr Whittaker stated:

“14.

… as it is understood from paragraph 18 of Armstrong 1, the

Administrators have assigned to HJI … The Administrators’ intention is, according to Armstrong 1, to pass over Transform’s files to HJI for the purposes set out at paragraph 18 of Transform 1. The Court may regard this as an unusual situation because HJI is understood to be directly related to Hugh James LLP, who (as above) acted for the claimants in the GLO (against BLM and Transform) and continue to act for the claimants against

Travelers in the live s.51 proceedings currently before the Supreme Court…

20.

The Joint Administrators should therefore be regarded as entitled to see the Joint Retainer documents but only on the basis that they receive them subject to the joint privilege….

21.

Travelers does not seek to prevent the Joint Administrators from sharing the documents with HJI (if that is what is intended) for the purposes of investigating the merits of a claim…Travelers, however, is concerned that the documents are privileged and are currently the subject of live litigation that is proceeding in the Supreme Court.

22.

In those circumstances, Travelers has proposed (please see the DWF letter dated 7 February 2019) that it will not object to the Joint Administrators sharing the documents with HJI on the condition that there are undertakings from HJI, the Administrators and CRS in relation to all the documents produced by BLM (other than those relating to all documents exclusively to the Transform Retainer) not to use the documents or to disclose them to any third party other than for the purpose of the investigation and pursuit of those claims which are described in paragraph 18 of Armstrong 1, and otherwise to maintain the confidentiality of the documents. Travelers asked whether there were any terms of the Assignment that would achieve the proposed results, but the Assignment was not disclosed.”

It is therefore clear that Travelers were then aware that it was the intention of Administrators pursuant to the Application to share the Joint Retainer files with HJI, but at that time it had not seen the terms of the Assignment.

In their second progress report dated 27 February 2019, the Administrators confirmed that the costs of pursuing the Application and their reviewing the files are being met by Hugh James.

In subsequent correspondence, CRS did not reveal to Travelers that Hugh James were representing HJI in relation to the Assigned Claims. Travelers’ solicitors, DWF, were informed of this by M&R for the first time on 4 March 2019. This led to Travelers requesting a copy of the Assignment from the Administrators “on an unfettered basis”.

In their skeleton dated 25 June 2019 for the hearing before ICCJ Jones, which led to the

The broad issue before the Court is whether Travelers’ privilege in the Joint Retainer files prevents the Administrators from disclosing those files to HJI and / or Hugh James, when such privilege is jointly held by Transform and Travelers.

During oral argument, it became clear that it is common ground between the parties that:

Before turning to the parties’ submissions, there are a number of matters relied upon by Travelers which need to be mentioned.

They fall into four categories of claims in which Travelers are or may be involved, namely (1) claims in relation to Allergan; (2) Scottish PIP claims; (3) other potential PIP claims; (4) claims in France. I shall describe each in turn.

Approximately 40 women have been diagnosed with or investigated for Breast Implant Associated Lymphoma as a consequence of being implanted with Allergan textured breast implants. As Mr Locke, a partner of Hugh James, states in paragraph 9 of Locke 2, Hugh James acts for one of those women in a claim against a clinic (which is not Transform (Footnote: ¹)) that sold the Allergan product directly. Leigh Day act for some of the other women, but Mr Locke states that his firm is not in discussions with Leigh Day about the other Allergan claims.

The Allergan claims have been recently and widely publicised in the media and Travelers contends that it seems likely that the Allergan claims will escalate into a new GLO. Travelers, as an insurer for Transform, has received correspondence from Leigh Day, requesting information regarding Transform’s insurance policy, with a view to possibly bringing claims against Travelers under the Third Parties (Rights Against Insurers) Act 2010 in respect to Allergan implants. So far, Travelers has been told that five clients of Leigh Day obtained their implants from Transform. According to Mr Armstrong, one of the Administrators, Transform performed around 1,800 replacement operations on women with PIP implants [see paragraph 5 of Armstrong 1]. According to the evidence of Mr Keating, given on behalf of Travelers, when Transform stopped using PIP implants, it used Allergan implants from late 2005 (or early 2006) [see paragraph 7 of Keating 2]. In such circumstances, Travelers contend that it is quite possible that a number of the claimants in the PIP Litigation may also ultimately bring Allergan claims.

The Joint Retainer files contain privileged material relevant to claims in respect of Allergan implants because (amongst other things) one issue in the PIP breast implant litigation was a comparison of the PIP implants with other implants. Travelers contend that if the Joint Retainer files are disclosed to Hugh James, this creates a significant risk that those files will be disclosed to Allergan claimants and PIP claimants to the disadvantage of Travelers.

Some 70 PIP claims against Transform are still being pursued in Scotland. Proceedings have been issued in those cases, but the litigation is in its early stages. The claims are the same as or similar to the claims pursued in the GLO, i.e. claims for breach of contract against Transform alleging that the PIP implants provided were not of satisfactory quality, in breach of the provisions of the Sale of Goods Act 1979.

If the Joint Retainer files are disclosed to Hugh James (and, thereby, to the GLO claimants), Travelers contends that there is a very real risk that there will be disclosure to the Scottish claimants. Thompsons solicitors represent some of the claimants in the GLO (and there are 23 claimants in the list of Claimants in the section 51 costs application who are represented by Thompsons). They also represent the claimants in Scotland. Travelers submits that the risk of disclosure to the Scottish claimants is obvious for this reason alone. Further risks of disclosure are set out by Mr Keating, a Chartered Insurer, employed by Travelers, in paragraphs 16 to 18 of Keating 1. Travelers’ position is that disclosure of the Joint Retainer files to the Scottish claimants would in effect be handing over Transform’s and Travelers’ privileged files on the defence of the PIP claims to the Scottish claimants against Transform whilst those claims are still live.

Paragraph 21 of the Written Case for the Claimants in the Supreme Court states that a large number of uninsured claims were brought against Transform, 426 of which were registered in the GLO (these are the Claimants who brought the section 51 application against Travelers), yet further claims were brought and stayed outside the GLO and “… yet further such claims may continue to be brought in the future”. Travelers contends that any such claimants (in the stayed claims or in the new claims) would understandably have a keen interest in trying to obtain the Joint Retainer files.

There is a dispute between the parties as to whether the limitation period in relation to such further claims has expired. It is Travelers’ position that the limitation period has not necessarily expired, and Travelers is still involved in the wider PIP litigation.

There is a pending claim in France against a German company that granted accreditation for the PIP product. Contrary to the evidence of Mr Locke on behalf of the Administrators, according to paragraph 9 of Keating 2, Transform is a named party in those proceedings. Mr Keating further states in that paragraph: “Transform assigned to the PIP claimants their rights to pursue such a claim against the German company. Travelers is not aware whether or how those assigned claims are proceeding.”

I now turn to the parties’ submissions, which I shall summarise.

Section 234 of the 1986 Act applies where “a company enters administration” and “any person has in his possession or control any property, books papers or records to which the company appears to be entitled”. It empowers the Court to “require that person forthwith (or within such period as the court may direct) to pay, deliver, convey surrender or transfer the property, books or papers to the office-holder”.

Section 236 of the 1986 Act applies “as does section 234” (i.e. where “a company enters administration”) and there is “any person known or suspected to have in his possession any property of the company … or any person whom the court thinks capable of giving information concerning … the promotion, formation, business, dealings, affairs or property of the company”. It empowers the Court to “require any such person … to produce any books, papers or other records in his possession or under his control relating to the company or the matters mentioned”.

The different principles relevant to section 234 and section 236 applications can be seen from Re Corporate Jet Realisations Ltd [2015] BCC 625. In holding at [26] that “As regards s.234 there is little or no argument that the court may order a person to deliver up books and records that belong to the company in question”, Registrar Briggs, implicitly accepted at [17] that “the extensive jurisprudence regarding the exercise of discretion under s.236 is not necessarily relevant in respect of company property … there would have to be exceptional circumstances for the court to deny a liquidator company property”. By contrast, he stated at [22] in a section 236 application “the court will need to be satisfied that the applicant has a reasonable requirement for the material sought, that the section is not being used abusively and that production does not impose an unnecessary and unreasonable burden on the respondents”. However, he

An illustration of the Court’s exercise of its powers is Walker Morris (a firm) v Khalastchi [2001] 1 BCLC 1, where the Court ordered a firm of solicitors to deliver up the company’s files to its liquidator. Nicholas Strauss QC, sitting as Deputy Judge of the High Court, held at [9b-e] “The starting point is that the files are the property of the Company, and the liquidator is entitled to possession of them. (2) A liquidator’s duty is to investigate the affairs of the company, and there is an obvious and urgent need for him to investigate the capital gains tax situation … (3) It is for a liquidator to decide whether to make a voluntary disclosure of the company’s documents, whether privileged or not, to third parties. If he needs guidance as to where his duty lies, he can apply to the court for directions”.

Hollander’s Documentary Evidence, 13th ed, §19-01 states the following principles at the beginning of Chapter 19, Privilege Deriving from Joint and Common Interests: “Persons who grant a joint retainer to solicitors retain no confidence against one another; if they subsequently fall out and sue one another, neither can claim privilege against the other for documents generated in respect of the joint retainer. A trustee or successor stands in the shoes of the original party. Against the rest of the world, however, either can maintain a claim for privilege in respect of such documents.”

The cases cited by Hollander include Crescent Farm (Sidcup) Sports v Sterling Offices [1972] Ch 553 and Surface Technology v Young [2002] FSR 387. In the former, Goff J (as he then was) held at p.562F: “It is clearly established that legal professional privilege of a predecessor in title does enure for the benefit of his successor”. In the latter, Pumfrey J held at [26] that the principle applied both “in respect of the Bird and

In Winterthur Swiss Insurance Company and others v AG (Manchester) Limited (in liquidation)and others [2006] EWHC 839 (Comm), a case in which BLM were also involved, Aikens J applied the successor principle (as here) to an assignee of a breach

In Hilton v Barker Booth & Eastwood (a firm) [2003] PNLR 610, the Court of Appeal held it was clear law that a solicitor acting for a mortgagor and mortgagee owed no duty to disclose confidential information about one to the other. Morritt VC analysed the authorities and set out the general principles as follows: “(1) a solicitor’s duty of disclosure depends on the nature and terms of his retainer … (2) a solicitor is under no obligation (quite the reverse) to disclose to a later client confidential information obtained under an earlier retainer … (3) if a solicitor acts for more than one party to a transaction then he may be obliged to disclose information obtained in that transaction from one of them to the other … and (4) in that event he cannot excuse his breach of duty to either of them by reference to the duty he owns to the other”.

In Stiedl v Enyo Law LLP [2012] PNLR 4, Beatson J held that a distinction was to be drawn between, on the one hand, cases where a firm had previously acted for, and had possession of privileged information in relation to, someone against whom they were not acting and, on the other hand, cases where a solicitor came into possession of such information in respect of someone they had not previously represented. In the latter case, any remedy is normally restricted to an order restraining the solicitor from using the confidential information. He also said [44] “the logical first question … is whether there is a real risk that information in the documents over which Mr Stiedl claims privilege and confidentiality can be used so as to yield an advantage to the claimants in the main proceedings or a disadvantage to Mr Stiedl. On the authorities, “real” risk means more than fanciful or theoretical risk, but does not mean “substantial” risk.”

Applying the above principles, the starting point is that the Joint Retainer files are

Read fairly, fully and in the context of the requirements for applications under section 234 and section 236 of the 1986 Act, in Armstrong 1 Mr Armstrong explains in perfectly adequate detail why the Administrators wanted to see the files and pass them onto HJI. As can be seen from the Jet Realisations case at [30] and Khalastchi case at [9c-d], an office holder is a stranger to the affairs of the company and his task is an evolving one. In order to obtain a full understanding of a company’s affairs, he needs to see its books and records, including its solicitor files. It is unjustified and impossible for an office holder to set out in evidence every matter on which documents he has not seen might be relevant to his duties. There is no obligation on him to do so.

As pointed out by Mr Reddy, a partner in CRS, in Reddy 2, there is a notable contrast between the unrestricted access that has been provided to Travelers and the use of the Joint Retainer files in the section 51 costs application without seeking Transform’s consent, and the response to the Administrators’ enquiries and the Application.

The Joint Retainer files contain a large number and wide variety of documents, only some of which (and it is likely to be only a small fraction) will be subject to legal professional privilege. It is accepted that such privilege is a joint one, with the result that the Administrators (in the same way as Travelers) cannot pass on privileged material to a third party without the other client’s permission. However, that is not what the Administrators’ are seeking to do: they want to pass on the Joint Retainer files to HJI, as an assignee of the Company’s right of action in which the Company still retains an interest. Travelers’ initial position in response to the Application was stated at paragraph 21 of Whittaker 1, namely that “Travelers does not seek to prevent the Joint Administrators from sharing documents with HJ1 (if that is what is intended) for the purposes of investigating the merits of a claim against BLM or Counsel, particularly as CRS asserts that the Joint Administrators will share in any proceeds of a successful claim.”. BLM’s initial position was that because they had chosen to mix Travelers’ documents (but not Transform’s documents) with the jointly owned documents, all of the latter had to be ‘sifted’ to remove Travelers’ own documents at the Administrators’ expense: see paragraphs 18 and 20 of Sherwood 1.

None of the points advanced in Armstrong 1, Whittaker 1, Sherwood 1 and Whittaker 2 persuaded ICCJ Jones not to make the entirely conventional order for delivery up of the Joint Retainer files (after sifting) to the Administrators. Nor did it dissuade him from (a) ordering at paragraph 6 of the July Order, that BLM should pay the costs of the sifting process (a concession made by BLM only on 26 June 2019, subject to their solicitors, M&R, carrying out that process); and (b) reciting that Travelers will bear its own costs of monitoring the same: see Re Harvest Finance Ltd (in liquidation) [2013] BPIR 1020.

The main issue for determination at this hearing is whether the Administrators are entitled to pass on the Joint Retainer Files to HJI. The answer, on the basis that most of them are not privileged and applying the successor principle referred to in the

That leaves the question of whether HJI can engage Hugh James as solicitors to review the Joint Retainer files. A person is generally entitled to engage whatever solicitor he likes. If a person enjoys privilege in a file, they are entitled to instruct their solicitor to review it on their behalf. The solicitor is not a third party, but an agent acting on behalf of their client. Accordingly, unless BLM or Travelers are entitled to prevent Hugh James from acting as solicitors for HJI, there is no basis for Travelers to object to the documents being provided by HJI to Hugh James for review.

Is Travelers entitled to stop Hugh James acting? Hugh James is not before the Court and Travelers have not issued any application for an injunction to restrain them from acting. Nevertheless, Hugh James (and HJI) are willing to give undertakings to assuage

Travelers’ position has changed over time. At paragraph 21 of Whitaker 1,

Locke 2 was produced to provide clarity both as to what Hugh James would do with the files and the undertakings (or such reasonable other undertakings) they are willing to provide. There is no risk of Travelers’ privilege being breached in the circumstances. If there was, the only remedy Travelers would be entitled to (per the Stiedl case) would be an order restraining use (which is unnecessary given Hugh James’ willingness to give any reasonable undertakings). If that is wrong (and Hugh James must be restrained from acting), then HJI must be free to act themselves or instruct another firm. In either event, HJI should not be deprived of all access to the Joint Retainer Files.

At paragraph 5 of Whittaker 3, Travelers submits that “it is clear that the impact of the

As to the first limb:

As to the second limb:

In relation to the additional matters relied upon by Travelers:

The nature of the undertakings offered by both HJI and Hugh James can be summarised as follows, namely undertakings:

The proposed information barriers: In addition to the undertakings offered by

In summary, Mr Lynch submits on behalf of Travelers that:

In this case, the issue of privilege arises in the context of an application for disclosure and delivery up made under sections 234 and 236 of the 1986 Act. It is well-established that privilege, as a fundamental human right, is not capable of being abrogated by statute unless by express words or necessary implication. Unless a statute makes it clear

Notably, courts are “slow to find that [privilege] has been impliedly excluded”: Matthews and Malek on Disclosure (5th edn) at 11.97. As noted by the editors of Phipson on Evidence (19th Ed.) at paragraph 23-15:

“Privilege can be impliedly or expressly abrogated by statute. The nowrecognised status of privilege as a fundamental right means that, particularly since the HRA, privilege should not be regarded as abrogated by a statute unless by express words or necessary implication. This was held by the House of Lords in R (on the application of Morgan Grenfell & Co Ltd) v Special Commissioners of Income Tax [2002] UKHL 21, [2003] 1 AC 563. There, at [45], Lord Hobhouse provided an authoritative definition of “necessary implication”:

“A necessary implication is not the same as a reasonable implication … A necessary implication is one which necessarily follows from the express provisions of the statute construed in their context. It distinguishes between what it would have been sensible or reasonable for Parliament to have included or what Parliament would, had it thought about it, probably have included and what it is clear that the express language of the statute must have included. A necessary implication is a matter of express language and logic not interpretation.”

In B v Auckland District Law Society [2003] 2 AC 736, Lord Millett expanded on this:

“A useful test is to write in the words ‘not being privileged documents’ and ask, not ‘does that produce a reasonable result?’ or ‘does it impede the statutory purpose for which production may be required?’ but ‘does that produce an inconsistency’ or ‘does that stultify the statutory purpose?’ The circumstances in which such a question would receive an affirmative answer would be rare. But a statutory right to require production of correspondence between a person and his solicitor for the purpose of obtaining legal advice, for example, would obviously be inconsistent with the existence of a right to withhold documents on the ground of legal professional privilege. And unless a taxing master could require the production of privileged documents it would be impossible for him to perform his function of taxing a solicitor’s bill of costs …”. (Footnote: ²)

It follows that unless the statute makes it clear by express words that privilege is abrogated, it will be a rare case indeed where the court will hold that it has such an effect by implication. Thus in Shlosberg v Avonwick Holdings Ltd [2016] EWCA Civ 1138 the Court of Appeal applied the presumption to lead it to the conclusion that the right to claim privilege (and the right to waive privilege) did not vest in the trustee in bankruptcy under the Insolvency Act but remained a right of the bankrupt. …”

On their true interpretation, there is nothing in sections 234 and 236 of the 1986 Act that necessitates the overriding of privilege. On the facts of the present case, Travelers acknowledges that the Joint Retainer files can be conveyed to the Administrators and they could bring a claim against BLM. The statutory purpose is not in any way prevented by a “normal” exercise of the Administrators’ powers. What cannot be done, on the true interpretation of sections 234 and 236, is for the Administrators to use those sections to override Travelers’ privilege in those documents to hand them to Hugh James. Again, if the Administrators are so prevented from overriding Travelers’ privilege, this does not deprive them of their statutory powers because (as above) if they had wanted to pursue BLM, they could have done. What has happened in the present case is simply that the Assignment has been given in circumstances which mean that there are now serious issues relating to Travelers’ privilege.

Further, when exercising its discretion under section 236 of the 1986 Act, the Court engages in a balancing exercise: Cloverbay Ltd (Joint Administrators) v Bank of Credit and Commerce International SA [1991] Ch 90. To permit privilege to be abrogated by virtue of sections 234 and 236 of the 1986 Act would be antithetical to the wellestablished principle that “once privilege is established… [it] is an absolute right, and there is no balancing act to be performed by the court”: Phipson on Evidence (19th edn) at 23-07. Courts have taken pains to emphasize that “the prospect of a judicial balancing exercise [regarding privilege] is illusory, a veritable will-o'-the-wisp” and an “essentially impossible task”: R v Derby Magistrates Courts ex parte B [1996] 1 AC 487 at page 512.

Strong reliance was placed by Mr Lynch on the decision of Re Corporate Jet

Travelers also referred to the decision of Mr Registrar Jones in Re Harvest Finance Ltd [2013] B.P.I.R. 1020, a case which involved the application of the fraud exception to a claim to privilege, which does not arise here. In that case, disclosure was ordered, but in reaching that conclusion the learned Registrar held that:

“15.1

The analysis of the sample documentation reveals that the relevant documents concern past conveyancing transactions and that the legal advice or assistance is being given for the purpose of achieving the conveyances. As a result, whilst the importance of privilege is not to be under-estimated, the substance of the privilege in this case will be on what might be described as “the low side” of the weight of the interest in non-disclosure.

…

15.3

Those to whom the privilege belongs are special purpose vehicles and it is difficult to see that prejudice will arise if the documents are considered (save to the extent that adverse conclusions of fraud will be drawn which would prevent there being privilege in any event).”

In the present case, Mr Lynch submitted that the substance of the privilege is not on what might be described as “the low side” of the weight of the interest in non-disclosure. Further, in the present case it is certainly not difficult to see that prejudice will arise if the documents are considered. Further and in any event, the above considerations were applied in the context of the application of the fraud exception, which has no application here and, a fortiori, if the above considerations were considered to be potential reasons not to permit disclosure in that context, they are even stronger reasons for not giving disclosure in the present context. He therefore submitted that if, which is denied, sections 234 and 236 of the 1986 Act permitted any encroachment of the right to privilege, on the highly unusual facts of this case, the Court’s discretion should be exercised against the Administrators.

It is common ground that joint privilege can only be waived jointly. In the present case, the relevant files are held subject to the joint privilege of Transform and of Travelers. Travelers contended that the consequences of joint privilege arising between party A and party B can in summary be stated, insofar as relevant, as:

The law is also clear that joint privilege cannot be waived unilaterally, even where there is a potentially conflicting statutory power to inspect or possess the relevant documents: see Leeds v Lemos [2017] EWHC 1825 (Ch) at [66]; R (on the application of Ford) v Financial Services Authority [2011] EWHC 2583 (Admin) at [63]; and Twin Benefits Ltd v Barker [2017] EWHC 177 (Ch) at [31].

Insofar as the Administrators rely upon the Winterthur case to enable them to provide access to HJI to the Joint Retainer files, such reliance is misplaced. Far from supporting their position, it supports Travelers’. That case concerned “After the Event” (“ATE”) legal expenses insurance, which had been underwritten by the second claimant (“NIG”). NIG appointed the First Defendant (“TAG”) (in liquidation when the proceedings were issued) as its agent and delegated to it the underwriting and handling of ATE policies (the “TAG Scheme”), which was a “no win, no fee” basis. The procedure was as follows: a claimant (the “TAG Claimant”) would complete preliminary details about a potential claim. There was then a detailed, four stage vetting procedure carried out before an ATE policy was issued, carried out by TAG, another company related to TAG (“AIL”), the Second Defendant (“Rowe Cohen”) and one of a large panel of solicitors (the “Panel Solicitors”). TAG concluded contracts with

Once the claim had passed the vetting procedures, at that stage a Panel Solicitor would be treated as retained, subject to the TAG Claimant’s instructions. The Panel Solicitors presented the TAG Claimants with a number of documents for signature. Once this was done and the ATE Policy premium was paid, the ATE Policy was on risk and the TAG Claimant would be issued with a Certificate of Insurance by TAG. There was an important term in the NIG Master Policy Document between NIG and the Assured

The TAG Scheme did not prosper and of those claims covered under it, some 67% of those claims resulted in demands for an indemnity. Litigation was brought because NIG asserted that it had suffered large losses as result of breaches of contract and duty by TAG, Rowe Cohen, and the Panel Solicitors. There were two assignments by NIG to Winterthur. The first was in relation to all causes of action against the defendants (the “First Assignment”) and the second related to an assignment of “NIG’s rights of access to information and documents relating to claims in respect of which ATE Policies were issued and on which an indemnity has been paid.” (the “Further Assignment”.) (see [6]).

Two categories of documents were considered. These were described at [42]. The first category consisted of those documents that were created before the ATE Policy for that particular claim came on risk (the “Pre-ATE documents”). The second category consists of all the documents that were created after the ATE Policy came on risk (the “Post-ATE documents”).

Two of the issues to be determined were (a) whether NIG was entitled to rely on “common interest privilege as a sword” so as to have access to documents that would otherwise be covered by privilege in favour of the TAG Claimants and (b) assuming that NIG was entitled to have access to documents in the hands of those solicitors acting for the TAG Claimants (the “Panel Solicitors”), was Winterthur entitled to the same access? (see [63](4) and (5)).

At [79] Aikens J held that “common interest” privilege could be used as “a sword” in relation to both “litigation” privilege and “legal advice” privilege, applying the approach of Rix J (as he then was) in Svenska Handelsbanken v Sun Alliance and

In relation to the Pre-ATE documents, Aikens J found at [92] that insofar as there was

“litigation” privilege in such documents, it belonged to NIG. The TAG Claimants had no such privilege. Further at [127], he held that

“Winterthur, as assignee of NIG’s causes of action against the Panel Solicitors, must be in the same (but no better position) with regard to such documents as the assignor of the claim. Therefore they must be disclosable to Winterthur in any action it brings against the Panel Solicitors.” At [129] he held that “NIG has, by implication, waived privilege in favour of Winterthur by granting Winterthur the assignment of the causes of action under the First Deed. Therefore Winterthur is entitled to disclosure of these documents by the Panel Solicitors in any action against them.”

Finally, at [130] he held that;

“Secondly, if there is an assignment of causes of action in favour of Winterthur as assignee, then Winterthur stands in the place of the assignor. In my view, an assignee is in a similar position to a successor in title with regard to the incidence of legal professional privilege. It is well established that a successor in title succeeds to and is entitled to assert any legal professional privilege that was available to its predecessor in title. Therefore, if NIG was entitled to claim legal professional privilege in relation to pre-ATE Policy documents, then so can its assignee, Winterthur. It follows that, as between Winterthur and the Panel Solicitors, the latter cannot refuse to give the former disclosure of pre – ATE Policy documents, because as against Winterthur, the Panel Solicitors cannot assert any privilege on behalf of the TAG Claimants.”

In relation to both the Pre- and Post-ATE documents, Aikens J found at [107] and [111], that NIG had a contractual right to demand that the TAG Claimant give it access to documents in the hands of the Panel Solicitors for use to pursue its rights and remedies to which it is “entitled”. Any assertion of a right to “litigation” privilege by the TAG Claimant in respect of pre-ATE or post-ATE Policy documents would be inconsistent with NIG’s right of access.

On the issue of reliance on “common interest privilege as a sword”, at [113], Aikens J found that the relationship between the TAG Claimant and NIG as ATE insurer gave rise to a common interest that could give rise to “common interest privilege”. At [116] he held that whilst documents that are obtained in the exercise of common interest privilege obviously cannot be used for any purpose the applicant wishes, it is clear that they can be used in litigation between the two parties who at an earlier stage had a

“common interest”, as happened in Commercial Union Insurance Co PLC v Mander. [1996] 2 Lloyd’s Rep 640. He stated : “It seems to me that it is a legitimate extension to allow use of the documents in litigation between one of the two parties that had a common interest at the time the document was created, (say A and B), and a third party where B (in this case the TAG Claimant) is under an express contractual obligation to A (in this case, NIG) in the wide terms set out in Condition 6 of the ATE Policy wording.” He concluded at [117] that NIG could rely on “common interest privilege as a sword” to have access to the Pre- and Post-ATE Policy documents in the hands of the Panel Solicitors that would otherwise be subject to the TAG Claimants’ privilege.

The Judge held that it was first important to understand exactly what had been assigned by both assignments. Under the First Assignment, NIG had assigned to Winterthur the right to bring proceedings to pursue the causes of action identified therein.

The Further Assignment, referred to at paragraph 82 above, stated that rights of access to information and documents arising under or in connection with various agreements, which include the ATE Policies, were being assigned. At [119], Aikens J stated “In my view, the only choses in action which NIG can purport to assign must be those that it can enforce by action. Therefore any purported assignments made by the Further [Assignment] must be limited to those rights of access to information and documents relating to Claims that NIG can enforce by action; i.e. the rights of action must be limited to NIG’s contractual rights of access to information and documents.” Those rights included obtaining documents from the TAG Claimants that were “genuinely necessary or required for the purpose of enforcing rights and remedies that NIG is “entitled” to enforce upon payment of an indemnity under the ATE Policy.” He therefore concluded at [124] that the Further Deed took effect as an assignment of the contractual rights of access to documents that were granted to NIG by the TAG Claimants under Condition 6 of the ATE Policy Terms.

At [125], however, he made clear that “… it does not make sense to talk of NIG purporting to assign “privilege” or “common interest privilege” by virtue of either Deed. Legal professional privilege is not a right to conduct and prosecute causes of action against TAG, Rowe Cohen, or Panel Solicitors. Nor, in my view, is it a right of access to documents or information that “arises under or in connection with” the ATE Policy, upon the proper construction of the Further [Assignment]. As I have indicated, in my view the rights assigned are limited to contractual rights of access granted to NIG; they do not extend to any rights of “privilege” created by the law.”

The Judge then considered the position separately in relation to Pre- and Post- ATE documents. Having held that only NIG possessed any legal profession privilege in relation to the Pre-ATE documents, he held at [127], that “Winterthur as assignee of NIG’s causes of action against the Panel Solicitors, must be in the same (but no better) position with regard to disclosure of documents as the assignor of the claim. Therefore they must be disclosable to Winterthur in any action it brings against Panel Solicitors.”

As far as the Post-ATE documents were concerned, at [132], Aikens J said that it was necessary to examine whether the right to access depends on the “common interest as a sword” or is based on the contractual right to access found to exist. At [133] he found that if the right is based on the former, it would be met by the claim that there is a

“common interest privilege” in favour of both the TAG Claimants and NIG. He said: “Moreover, if legal professional privilege is held jointly, then it cannot be waived by one person alone. In my view that rule must apply equally to common interest privilege as much as to “joint privilege” where, e.g. two parties jointly obtain advice from a lawyer.”

Importantly, at [134] he said; “As I have already stated, the assignment of the rights given by the First Deed will not, by itself, enable Winterthur to obtain disclosure of the post-ATE Policy documents that are the subject of “common interest privilege”. I agree with the submission of Miss Carr that Winterthur must take the assignment of the causes of action with “all its benefits and burdens”, one of which is that the post-ATE Policy documents are subject to a privilege that is common to the TAG Claimants and NIG. NIG’s right to assert that privilege is not within the assignment of the causes of action covered by the First Assignment. Nor, as I have already stated, is the right to assert “common interest privilege” within the terms of the assignment of the Further Deed.”

Mr Lynch relied on this paragraph of the judgment and submitted that by parity of reasoning the Assignment in the present case, could not put HJI in a better position to

Aikens J then considered the contractual position. Looking at the terms of Condition 6 of the ATE Policy Terms (recited at paragraph 81 above), he held at [136] that its wording was extremely wide and was such that “it required the TAG Claimant to waive any privilege that it may have in documents if that is necessary or required by NIG for the purpose of enforcing claims against third parties if it is entitled to bring such claims upon paying an indemnity under the policy. As the TAG Claimant has no choice, then I think that the wording of the Condition 6 is, effectively, an automatic waiver of privilege by the TAG Claimant, provided that it is necessary or required by NIG for the purposes defined in the clause.” He continued: “That conclusion is, I think, consistent with the decision in Brown v GRE, [1994] 2 Lloyd’s Rep 325, which holds that an insured cannot use “litigation privilege” to prevent the insurer from using his contractual right of access to the documents.” The effect of the Further Deed was that

Mr Lynch contrasted the terms of the Assignment in the present case, and he submitted that neither clause 1(i) or (ii) affected or overrode the rights of Travelers, the other holder of the joint privilege. There was no contractual automatic right of waiver here, nothing comparable to Condition 6 of the ATE Policy Terms. Insofar as the Administrators relied upon [127] and [130] of the Judgment, such reliance was misplaced because those paragraphs were not dealing with joint privilege (see paragraphs 86 and 87 above).

When Travelers believed that disclosure of the BLM files was to be made to HJI and was unaware that it was also to be made to Hugh James, Travelers sought to assist the Administrators by offering to waive its privilege in the files, subject to necessarily strict undertakings (i.e. to prevent disclosure to any third party, which Travelers says includes Hugh James). However, had Travelers known at that time that it was intended that the files were to be provided to Hugh James, Travelers would simply never have offered the possibility of accepting such undertakings, for obvious and very strong reasons.

Hugh James is under a duty to its clients to disclose information relevant to its retainer(s). This principle was summarised in Spector v Ageda [1973] Ch 30, by Megarry J at page 48:

“A solicitor must put at his client’s disposal not only his skill but also his knowledge, so far as is relevant; and if he is unwilling to reveal his knowledge to his client, he should not act for him. What he cannot do is to act for the client and at the same time withhold from him any relevant knowledge that he has.”

The duty to disclose relevant information applies even when the solicitor is subject to conflicting duties. In Moody v Cox [1917] 2 Ch 71, Lord Cozens-Hardy MR held that the solicitor was bound to disclose all material facts relating to his client’s matter, and was not relieved of that obligation by the fact that he owed a conflicting duty to his cestui que trust. The existence of a conflicting duty does not negate the duty of a solicitor towards his client. The solicitor remains bound by both duties, which places him in a position of “grievous responsibility”. The principle has been affirmed in the case of Hilton v Barker Booth & Eastwood [2005] 1 WLR 567, where at [41] Lord Scott held that “if a solicitor puts himself in a position of having two irreconcilable duties … it is his own fault. If he has a personal financial interest which conflicts with his duty, he is even more obviously at fault”.

Paragraph 93 of Travelers’ skeleton sets out Hugh James’s various retainers on which Travelers relies. Some of these, such as the claims in France and the claims against The Hospital Medical Group [see paragraphs 7 and 8 of Locke 2] do not appear to have anything to do with Transform or Travelers, but others include:

I have addressed these at paragraphs 36-37 above. Mr Lynch submits that disclosing the Joint Retainer files to Hugh James (which contain privileged materials relating to

The undertakings offered by Hugh James and HJI in Locke 2 are not a realistic solution to the issues created by handing privileged files to Travelers’ and Transform’s opponents in the PIP litigation and possibly the Allergan litigation. At paragraph 94 of its skeleton, Travelers sets out the reasons why the proposed undertakings do not work. They can be summarised as follows: there is a risk that some claimants in the GLO may also bring claims relating to Allergan. If the Joint Retainer files were disclosed, the individual women claimants who instruct Hugh James in the PIP litigation and the Allergan litigation (unless their retainers have been appropriately restricted and / or they themselves give undertakings, which has never been indicated) would be entitled to request from Hugh James disclosure of the Joint Retainer files (and

Furthermore, even if there were no such risk as above, no draft undertakings have been produced, nor have the details of the proposed information barriers been sufficiently articulated to be given proper consideration, especially in the complicated and opaque circumstances of the Application. There is a real risk that the proposed information barriers will not work. As to information barriers, Travelers referred to the well-known decisions of Prince Jefri Bolkiah v KPMG [1999] 2 AC 222 and Koch Shipping Inc v Richards Butler (A Firm) [2002] EWCA Civ 1280. The authorities provide that the Court should intervene unless it is satisfied that the risk of disclosure of confidential information is no more than fanciful or theoretical. Further and in any event, the authorities on information barriers address a very different and less troubling situation than the present. Travelers relied upon Conflicts of Interest by Hollander and Salzedo, 5th Ed., paras 4-027, 4-028, 4-031, 6-001, 6-002, 6-004, 6-017, 6-024 to 6-028, 7-001 to 7-003 and 7-011 to 7-017.

Once any such documents and information enter the public domain, it will be essentially impossible to recover that documentation / information and / or to prevent its use. This will, of course, include privileged material (where the privilege belongs to both Transform and Travelers) and material relevant to the new Allergan claims. Further, once confidential information enters the public domain, it is likely to be argued that such information loses its quality of confidentiality and seeking to restrain the use of the information will also be difficult. This concern is even more significant where the material is privileged.

Even if it cannot be said for certain that there will be a leak of Travelers’ privileged information as envisaged, or even that such leak is likely, there remains a material risk to Travelers for the reasons set out above. As long as that risk is more than fanciful

Travelers’ position in relation to them is described at paragraphs 39-40 above.

I have referred to these at paragraphs 41-42 above. Travelers contended that disclosure to the current claimants risks disclosure to “new” claimants, particularly where the current claimants are represented by both Hugh James (as lead solicitors) and / or a large number of other firms of solicitors, more than likely the same solicitors who will represent the “new” claimants and who would be entitled to obtain the Joint Retainer files, were they disclosed to Hugh James / the claimants. The risks to Travelers of the privileged material being used against it in some way at some later stage and / or getting into the public domain and being used against it in future is sufficiently high that it is not reasonable that Travelers should be compelled to face that risk.

In their skeleton argument, Travelers relied upon an alleged lack of candour on the part of the Administrators in not revealing in Armstrong 1 that Hugh James would be acting for HJI and thus would receive all the disclosed documents, and further, that in correspondence with Travelers’ solicitors, DWF, neither CRS nor the Administrators disabused Travelers of its obviously mistaken belief that the files would only go to HJI and not to Hugh James. This should be taken into account, when determining whether disclosure to the Administrators and thereafter to Hugh James is essentially “safe” for Travelers and should result in disclosure of the Joint Retainer files being refused.

The proposed professional negligence claim that is envisaged is weak, which should militate against disclosure of the Joint Retainer files, because it is a pointless exercise. Moreover, very little of the proceeds will be received by the Administrators pursuant to

BLM has set out the steps taken by them in relation to compliance with the July Order in Gooding 1 and in Herne 2. I have set out the procedural history above and say no more about it here. It denied that it has favoured Travelers over the Administrators, but amongst other things, stated it was concerned that Travelers should be aware of the Assignment, so that if HJI and Hugh James were held to be third parties, Travelers might have a valid objection to disclosure to them. In relation to the provision of the Transform files, they could have been provided earlier but by reference to the correspondence they submitted that this was not high on the Administrators’ priorities.

As far as the issue before the Court is concerned, BLM submitted that from the outset, it accepted that Transform (acting by the Administrators) is entitled to the Joint Retainer files over which there is joint privilege, or at least to a copy of those files, but it has been necessary to go through the exercise of sifting the papers so as to exclude documents over which Travelers has the sole privilege. It is now common ground that Transform (acting by the Administrators) is entitled to the Joint Retainer files.

The real dispute between the parties is over what the Administrators are entitled to do with the Joint Retainer files. From the outset BLM have taken a neutral stance on this issue. BLM’s only role in these applications is to assist the court. BLM are in the same position as a trustee who is faced with a dispute between two beneficiaries or a debtor who interpleads because he is not sure which of two rival candidates is entitled to the money which he admittedly owes.

It is important to remember that the Joint Retainer files sought by the Administrators, are the property of Transform. Where an application is made pursuant to section 234 of the 1986 Act, adopting the approach taken in the Re Corporate Jet case, “there is little or no argument that the court may order a person to deliver up books and records that belong to the company in question”. Travelers do not seem to me materially to challenge that entitlement.

The dispute revolves around what the Administrators are entitled to do with the documents and materials contained in the Joint Retainer files once they have them. As stated at paragraph 33 above, it is common ground that both Transform and Travelers can see the Joint Retainer files, but neither can disclose it to a third party without the other’s consent. Thus if the Administrators had not assigned the Assigned Claims, would they be entitled to use the documents within the Joint Retainer files for the purposes of proceedings in relation to such claims and to instruct solicitors to advise in that regard? In my view Travelers could not prevent this and as I understand it, it accepts this. That exercise would not require a waiver by Travelers, because a party’s solicitors are not to be regarded as independent third parties, but as the agents of those instructing them. Such an approach is consistent with the Winterthur case where at [116], Aikens J held that whilst documents that are obtained in the exercise of common interest privilege obviously cannot be used for any purpose the applicant wishes, it is clear that they can be used in litigation between the two parties who at an earlier stage had a “common interest”. Another permitted purpose, therefore, would be for the Administrators to use the documents in seeking advice from solicitors in relation to possible litigation relating to the claims that were subsequently assigned by Transform, and in any litigation which followed.

In my judgment, the key issue here relates to the effect of the Assignment and the entitlement of HJI, following the execution of the Assignment. In Winterthur, Aikens J held at [130] that the right to access privileged information can be transferred by the assignment of rights of suit. This is because the assignee of such rights stands in the position of the assignor. If HJI are to be regarded as assignees, then the successor principle applies. However, as Mr Lynch points out, correctly in my view, that paragraph was dealing with a situation where there was sole, as opposed to common interest, privilege. Aikens J treated “common interest” privilege and “joint” privilege as being governed by the same principles, see [133]. I agree and therefore I will adopt the same approach as he did. With joint privilege, the position is as set out at [134] of

I would make clear that in reaching this conclusion, and in finding that HJI are entitled to access the Joint Retainer files as assignees, I do not do so on the basis of overriding any joint privilege in favour of a third party or interpreting the provisions of section 234 and 236 of the 1986 Act so as to abrogate privilege. In my judgment, all that is being done here is to enable Transform’s documents, namely the Joint Retainer files, some of which are privileged, to be delivered up to the Administrators, who are entitled to provide access to HJI to them as assignee of Transform’s cause of action of the Assigned Claims for the purpose of seeking advice and pursuing litigation in relation to those claims. It seems to me that there is no need to rely upon the provisions of section 236 of the 1986 Act here. In my view, the remedy sought by the Administrators is to be found within section 234. I would make it plain, however, that had I regarded HJI as a third party, as opposed to the assignee of Transform’s cause of action of the Assigned Claims, I would not have overridden privilege in order to provide it access, either under the provisions of section 234 or 236 of the 1986 Act.

If I am wrong that waiver of privilege was required, in paragraphs 21 and 22 of Whitaker 1 (recited at paragraph 28 above), by reference to DWF’s letter dated

That then raises the question, having found that HJI are entitled to access the Joint

As Mr Boardman points out, Hugh James is not before the Court and Travelers have not issued any application for an injunction to restrain them from acting. A person is generally entitled to engage whichever solicitor he wants, subject to the solicitor being willing to act. The solicitor is not a third party but acts as the agent of their client. In those circumstances, I cannot see how in the present action, I can prevent HJI instructing Hugh James and Hugh James from having access to the Joint Retainer files, particularly in the light of the undertakings which have been offered by HJI and Hugh James, as set out in paragraph 8 of Locke 2, or such reasonable alternatives as the Court should require.

In relation to the various objections made by Travelers to the proposed undertakings:

I do not regard myself as in a position to form a clear view as the strength or weakness of the professional negligence claim by HJI as assignees against BLM or counsel, nor would it be appropriate for me to do so in the absence of the relevant materials. I do not regard it as material in terms of the findings I have made earlier or the suitability or otherwise of the undertakings proffered by HJI and Hugh James.

In short, having reached the conclusion that HJI are entitled to see the Joint Retainer Files pursuant to the application of the successor principle, I am satisfied that Travelers can be afforded appropriate protection against potential misuse of the Joint Retainer files’ information by Hugh James by way of undertakings by HJI and Hugh James.

In the present circumstances, it should suffice that:

I determine the Issue in favour of the Administrators, subject to satisfactory undertakings being provided by HJI and Hugh James covering the matters set out in paragraph 126 above.

As I understand it, the Joint Retainer Files have been provided to the Administrators pursuant to the July Order as amended. If there are any further matters that need to be addressed in terms of timetabling, these can be addressed in any submissions in relation to consequential matters. I propose to deal with costs and any other consequential matters in writing and would ask that written submissions be lodged, together with the draft Order, no later than 4.30pm on Friday 7 August 2020.

I would also ask that by that date, Counsel endeavour to agree the terms of a draft Order, and the terms of the proposed undertakings to be given by HJI and Hugh James, reflecting the matters I have referred to in paragraph 126 above. Insofar as there are areas of disagreement, I would ask that that they set out the rival versions in the draft. If amendments are subsequently made by me to the draft undertakings, I will require HJI and Hugh James to indicate to the Court that they are prepared to give those undertakings in that form. Once this is done, CRS and the Administrators will be released from their undertakings contained at paragraph 10i of the July Order insofar as it relates to HJI and Hugh James, and 10ii should be amended to “other than for the purposes of the investigation and pursuit of those claims which are described in paragraph 18 of Armstrong 1 and those described in paragraph 28 of Armstrong 1.”.

I conclude by thanking Counsel once again for their assistance in this matter.