Allegations of conflicts of interest against Guernsey law firm Ozannes have been thrown out in a landmark action with parallels to the famous Prince Jefri and Koch Shipping litigation cases in London.
Rival firm Babbe Le Pelley Tostevin alleged that the move by its former litigation partner Jeremy Wessels to Ozannes would lead to a real risk of inadvertent disclosure or misuse of confidential information relating to cases the partner was handling while at Babbes.
Wessels was handling seven actions for Babbes in which Ozannes was on the other side when he moved to the Guernsey firm.
Babbes sought an injunction restraining Ozannes from continuing to act for the other parties. Ozannes lost at first instance but
appealed. Carey Langlois, which recently merged with Olsens to form Carey Olsen, was also involved in the litigation and claimed a conflict of interest in relation to one of the seven cases.
On appeal, nine undertakings were proposed by Wessels to avoid the risk of inadvertent disclosure. They included not discussing the cases with other Ozannes partners, occupying an office “separated horizontally and vertically” from those lawyers handling the material cases, and use of a different fax machine, photocopier and secretary.
In addition Wessels stated that his age, experience and standing after 10 years as a litigator made him unlikely to divulge confidential information. Ozannes also considered it “unrealistic” for a partner to give up acting for all those clients who pose a conflict of interest when they move to another firm.
The three Court of Appeal judges, having also heard evidence relating to England's most significant conflict of interest cases, Prince Jefri Bolkiah v KPMG and Koch Shipping v Richards Butler, which concluded in the law firm's favour, subsequently ruled in favour of Ozannes.
The judgment concluded: “Mr Wessels and his new colleagues are entitled, in my judgment, to come to the court and to say that, unless they can be trusted completely to comply with their undertakings to preserve the confidentiality, then no Guernsey advocate and no Guernsey firm to which a Guernsey advocate has moved can ever be trusted in this way.”
Peter Ferbrache, head of litigation at Ozannes, said: “In each of the cases, clients made it clear that they wanted Ozannes. In light of the recent merger of Carey Langlois and Olsens, it's even more vital that someone stands up for the freedom for clients to instruct an advocate of their own choice.”