When claims or other exposures arise, a sometimes diverse range of reputational and brand risks, of affected individuals as well as the business(es) they work for, are usually as critical as the prospective financial exposure. Clear appraisal and understanding of what information belongs to whom, and the extent to which it should and can be kept confidential in practicality and in law, is always a ‘first base’ consideration.
The available legal protections are:
- Rights of confidentiality: Abuses of other people’s confidential information are actionable torts and frequently they can also be breaches of contracts of client engagement, insurance, or staff employment. These have their limits however. They are often co-owned by several different people, not all of whom will share the same interests or concerns for their protection; and they can be overridden by the courts or other higher authorities.
- Privilege: The Public Policy doctrine whereby advice received from an external independent lawyer – Legal Advice Privilege – and/or all internal or external communications pertaining to litigation which is current or imminent – Litigation Privilege – are immune from scrutiny by anyone else, including Government or the Courts.
These rights are not commercial commodities. They can’t be sold or transferred. Nor can they be waived or varied by anyone except by the person who owns them; and if co-owned, a waiver by one owner does not extend to another who has not waived them. Nevertheless, they have to be treated as assets and understood, measured and kept protected like any other.
A typical scenario could be where a professional firm advises, directly or through their common representatives, a range of investors or participators, each with their own circumstances and reasons for investing, in a tax avoidance scheme which fails, due to the firm’s technical or practical error. The rights of confidentiality and privilege arising for and owned by each investor may be different, and although some or even most of their information may be common to all, there will often be items which it would not be in their interests to disclose or share. Any firm facing such exposures needs to be careful not to compound or aggravate their peril by overlooking these.
- Differentiate all separate people and entities affected by a matter and understand their respective interests, rights and obligations;
- Assess the respective relevance and value of their information;
- Recognise and respect the different coalface team-members’ interests and priorities from those of their firm or supervisors;
- Know the differences between rights of confidentiality and rights of privilege;
- Encourage or arrange separate advice and representation for different parties if their respective confidentiality rights or obligations conflict.
- Waste or spend time and money disproportionately with silly fastidiousness;
- Confuse or muddle information and known facts with unknowns and hypotheticals.
- Gamble or speculate, especially with what doesn’t belong to you.
About the author:
F Mike Willis Ltd is an incorporated solicitors practice established by Mike Willis. Its doors opened on 1st November 2014 in a converted granary premises adjacent to Mike’s home.
The firm offers the same niche services Mike has been providing to clients and colleagues in his former firm for three decades: helping professionals in England and Wales with their identified civil liability and regulatory risks and exposures and opportunities. His experience with a great variety of such situations equips him to provide advisory and representative services, with commerciality, objectivity and professionalism, at proportionate or attractive cost.