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PRINCE JEFRI AND KPMG

THE CASE: The House of Lords was asked as to the duties of the
respondent accountants (KPMG). KPMG had information confidential
to a former client, the appellant, which might be relevant to
instructions which they then accepted from the Brunei Investment
Agency, of which Prince Jefri had been chairman, to investigate the
whereabouts of certain assets suggested to have been used by
Prince Jefri for his own benefit.

HELD: The House granted an injunction restraining KPMG from


acting for the Agency. The burden was on KPMG to show that there
was no risk of the information coming into the possession of those
within KPMG acting for the Agency. Though KPMG had tried to erect
a Chinese wall, this was ad hoc and within a single department;
further the two teams involved one which had acted for Prince Jefri
and the one which was acting for the Agency contained large and
rotating memberships of persons accustomed to working with each
other. Also the presence of a LAN and KX.
A solicitor has an absolute duty to his clients, and to former clients,
to protect their confidence and could not later act for an opponent.
An accountant providing litigation support is bound by the same
duties, an information barrier, a so-called Chinese Wall, erected
within the firm is liable to be insufficient. The duty extends beyond
that of refraining from deliberate disclosure, and includes the duty
not to put the client at risk: . . a fiduciary cannot act at the same
time both for and against the same client, and his firm is in no
better position. A man cannot without the consent of both clients act
for one client while his partner is acting for another in the opposite
interest. His disqualification has nothing to do with the
confidentiality of client information. It is based on the inescapable
conflict of interest which is inherent in the situation. and (Lord
Millett) I prefer simply to say that the court should intervene unless
it is satisfied that there is no risk of disclosure. It goes without
saying that the risk must be a real one, and not merely fanciful or
theoretical. But it need not be substantial.
Lord Millett said: It is incumbent on a plaintiff who seeks to restrain
his former solicitor from acting in a matter for another client to
establish (1) that the solicitor is in possession of information which
is confidential to him and to the disclosure of which he has not
consented and (2) that the information is or maybe relevant to the
new matter in which the interests of the other client is or may be
adverse to his own.

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