Practice and Procedure

NATIONAL WESTMINSTER BANK PLC (Claimant) v JEFFREY HAL BONAS (Defendant/Part 20 Claimant) & BRICE DROOGLEEVER & CO (A Firm) (Part 20 Defendant) (2003)

PUBLISHED August 14, 2003

A claim that a solicitor had acted in breach of confidence, had been negligent and had unlawfully interfered with contractual arrangements was dismissed for want of a causal link between any such improper conduct and some actionable loss.Trial of an claim under CPR Part 20 by the claimant ('B') for damages for alleged breach of confidence and negligence by his former solicitors ('the firm'). Following B's divorce the firm had acted for B in ancillary relief proceedings in which B had been ordered to pay a substantial sum to his wife. B had borrowed from National Westminster Bank plc ('the Bank') a large part of the sum that he was required to pay. A friend ('E') who had also been a client of the firm guaranteed the borrowing to a limit of ?350,000 and charged his flat to the Bank in support. B failed to repay the Bank. The Bank looked to E for payment and E instructed the firm to advise him. B complained that that was improper, by reason of the firm having acted for him in the ancillary relief proceedings and having received confidential information during that retainer, but the firm continued to act for E. B negotiated a settlement with the Bank for £250,000 to be paid out of the proceeds of sale of E's flat in discharge of both B and E's liabilities. B contended that the settlement was contractual and binding on E. However, E, advised by the firm, separately agreed to pay the Bank £230,000, exonerating him from further liability but leaving B still exposed to the Bank for the balance. In June 1996 the Bank started proceedings against B for £578,000. In 2001 B raised a Part 20 claim in those proceedings against the firm. B settled with the Bank but the Part 20 claim proceeded to trial. B claimed that the firm: (i) had acted in breach of confidence owed to him by giving information learnt during the ancillary relief proceedings to the Bank or E; (ii) were negligent in representing to the Bank that B had substantial assets; (iii) had deliberately interfered with or procured breaches of the settlement agreement that he had arrived at with E and the Bank with the result that he had remained liable the Bank; and (iv) had unlawfully interfered with his interests by unlawful means, which included reckless representations.HELD: (1) The firm should not have acted for E as it had and it had acted in breach of confidence at many stages over a period of years. (2) There was no causal link between the breaches of confidence alleged and the behaviour of E or the Bank and none between the breaches of confidence and any loss claimed by B. The claim for breach of confidence failed. (3) The firm only owed B a duty of care in respect of B as a former client. Within such duties the firm was potentially liable only to the same extent as the claims for breach of confidence. Therefore the claims in negligence failed. (4) No binding settlement agreement had been made. In any event, there was no reason for the firm to believe there was a binding contract and no evidence that the firm had advised E that the agreement could have been broken with impunity or should have been broken. (5) The unlawful means alleged were said to be the breaches of confidence already dealt with. However, in the absence of a causal link between the firm's breaches of confidence and the loss alleged to have been suffered by B, or, more widely, between any improper conduct by the firm and some actionable loss to B, the firm was not liable for interference by unlawful means.Part 20 claim dismissed.

[2003] EWHC 1821 (Ch)