Practice and Procedure


PUBLISHED April 8, 2003

In the circumstances it had not been necessary to order the removal of a liquidator's solicitor, who had previously acted for the company in liquidation and was also an unsecured creditor of the company.Application by the first respondent ('Latif') to remove the liquidator's solicitor ('K'), who formerly acted on behalf of the company ('Recover') in liquidation. K had been a partner in Dibb & Clegg, a firm of solicitors. Of all Recover's unsecured creditors, Dibb & Clegg had the largest proved sum owing to it, namely ?250,000 in legal fees for litigation conducted by K on behalf of Recover and heard by Ebsworth J in 1999 ('the 1999 litigation'). The present proceedings challenged both a finding in the 1999 litigation and K's understanding of his instructions from Recover. Latif was a company that had represented, inter alia, Latifa ('L') interests. L had been a director of Recover and had instructed K in relation to the 1999 litigation. In support of its application, Latif had alleged that: (i) L had given K confidential information and K had not had L's consent to disclose that information; and (ii) K would have been called to give evidence in the present proceedings and that that evidence would not have been in the interests of his present client, and would potentially have resulted in a conflict of evidence. Latif further alleged that the potential for conflict had been increased by K's financial interest in the present proceedings, as a partner in Dibb & Clegg.HELD: (1) The allegation that K had had confidential information that he had not been entitled to disclose had not been adequately particularised. Accordingly, Latif had not made out a risk of a conflict of interest in relation to that information. (2) (Obiter) Where a solicitor may have had to give evidence and there had been no confidential information in issue, the solicitor's removal had to have been fully justified; but there need not necessarily have been exceptional circumstances. (Kjell Tore Skjevesland v Geveran Trading Company Ltd (2002) distinguished). (3) K's interest in the outcome of the present proceedings had been irrelevant to the extent that his evidence regarding his instructions from Recover would have been the same whether or not he had been retained as the liquidator's solicitor. (4) However, given his interest, K had not permitted to advise the liquidator as to the legitimacy of the proofs of Recover's unsecured creditors. (5) Moreover, K should not have acted for the liquidator if he considered that his evidence would have harmed the liquidator's interests. (6) K's removal was not required to maintain public confidence in the courts. (7) In the circumstances, it had not been necessary to remove K as the liquidator's solicitor.Application dismissed.

[2003] EWHC 536 (Ch)