High Court denies anonymity to ex-client suing firm

Beltrami: Radical application

A former client suing Leeds law firm Shulmans for £4m has lost his bid to do so anonymously.

The professional negligence claim concerns a confidential settlement on which the firm advised, and the claimant’s concern that being named would be a breach of the settlement deed.

He said this would put him at “high risk” of action by the other party to the settlement.

Shulmans argued that it faced a potential disadvantage because it would be unable to contact the other party for its defence.

The underlying claim in ABC v Shulmans LLP [2019] EWHC 2458 (Comm) is for alleged professional negligence in the resolution of a dispute between the claimant, his former corporate employer, and the individual who owned that corporate employer.

“The individual is a prominent businessman, whose name is well known,” the judge said.

The claim settled on a confidential basis, with the parties unable to disclose anything about it publicly absent a court order.

The claimant was suing Shulmans on the basis that its negligence compelled him to accept a settlement that was a fraction of his true entitlement.

Mr Adrian Beltrami QC, sitting as a High Court judge, said the claimant had been unable to identify any previous cases where such an order had been made, and so he was “mindful of the concern expressed by the defendant as to the radical nature of the application”.

The claimant’s counsel argued that the confidentiality clause engaged his article 8 right to privacy.

The judge ruled that the claimant’s wish not to be sued was not a relevant factor: “The claimant is not compelled to disclose the terms of the deed and thereby risk a breach of the confidentiality obligation, because he is not compelled to sue at all.

“And if he wishes to sue, then he is able to seek… a permissive order of the court pursuant to [the deed].”

Mr Beltrami QC continued that, to the extent the clause did give the claimant article 8 rights to privacy, they were not such as to derogate from the principle of open justice in a claim brought by the claimant himself.

He added: “Ultimately, as it was put to me by [his counsel], the claimant has the benefit of a confidential agreement and ‘should not have to forego that confidentiality to bring his claim’. But this only raises the question in response, why not?

“Whilst the court may use its powers to afford protection for information whose release into the public might cause harm, for example by the use of confidentiality clubs or specifically tailored hearings, this will have to be justified by the circumstances and should be as narrowly used as possible.

“The existence of an obligation of confidence, per se, does not shift the balance. Confidential documents are still subject to disclosure…

“In my view, the mere fact that the deed contains a confidentiality provision from which, it is said, the claimant would like to benefit, does not begin to justify the relief sought.”

The judge also observed that the claimant’s draft order only sought to withhold the identity of the claimant, the owner and the company, rather than uphold the confidential terms of the deed.

This would not achieve “the maintenance of the rights said to support the application”.

Further, it was not even clear or established that the claimant would or would likely breach the terms of the confidentiality clause.

Mr Beltrami QC nonetheless retained the anonymity in his ruling as it was “unnecessary” to use the names “for the resolution of the issues before me”.

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