"18 As I said, I have no doubt that there are able lawyers in some of the smaller firms in Jersey and if Gamlestaden is forced to instruct a smaller firm in order to progress this litigation in Jersey then it will have to do so. It would not, however, be Gamlestaden's choice to do so. The importance of having a firm with appropriate resources to deal with a substantial piece of commercial litigation cannot, in my view, be over-estimated. Commercial litigation can be document intensive and can involve a firm having to explore a great many factual and legal avenues as part of the litigation. Having strength and depth is, accordingly, important since it is possible (and, indeed, frequently is the case) that a small firm can be swamped with the work required on a large commercial case. A large firm may be able to dedicate a number of fee earners to deal exclusively with the case. A smaller firm may not have that luxury. Indeed, a large firm may use the lack of resources available to a smaller firm to its tactical advantage. In a case of this sort, which raises complex corporate law issues, it is also important to ensure that the law firm acting has access to lawyers who have corporate law expertise to assist in the preparation of the case."
He said that he and his clients agreed with the sentiments expressed by the Court in paragraph 35 of the July judgment, namely that perception was important. It was accepted that this must be reasonable perception, but he emphasised the steps which Gamlestaden had taken to try and obtain representation. He said that it was important for the perception of justice that Gamlestaden should if possible be able to instruct a firm of similar size, resources and standing to that instructed by Abacus. Gamlestaden was entitled, unless it was impossible, to feel confident that there was an equality of arms in such a complex and substantial piece of commercial litigation.
Mr O'Connell argued that the basis upon which the Court had reached its decision in the July judgment was now known to be incorrect. Whereas it had been thought that Gamlestaden could be represented by Firm A (with which it would have been entirely happy) that was no longer the case. As the Court envisaged at paragraph 47 of its judgment, the balance now swung in favour of the need to ensure a perception of fairness and equality of arms.
Mr Le Cocq submitted that, as mentioned in para 8 above, there were two competing principles which the Court had to consider. He also accepted that, in a case such as this, there might come a time when the need to ensure adequate legal representation outweighed the risk of the misuse of confidential information. However he submitted strongly that that position had not yet been reached. He reminded the Court that it had found that there was a real risk that some of the confidential information in the hands of Appleby relating to Abacus might turn out to be relevant to the Baltic proceedings. Abacus was entitled to protection from the risk of misuse of such information unless there was a very strong countervailing public interest which outweighed it. This would only arise if the Court was satisfied that Gamlestaden could not obtain adequate alternative representation. It was not a question of Gamlestaden's perception; it was a question of whether adequate representation was in fact available. The Court must view the matter objectively.
He referred to Mr de Figueiredo's affidavit which pointed out three firms which, he submitted, were capable of conducting the Baltic proceedings but had not yet been approached by Gamlestaden. He submitted that Gamlestaden's perception that it needed to have a firm of the same size as Ogier in order for there to be equality of arms was not objectively justified and was insufficient to lead the Court to reverse its decision, so as to allow the possibility of Appleby being able to use confidential information acquired from Abacus in a manner contrary to Abacus' interests.
Decision
The Court has carefully considered these submissions but has concluded that, in the light of the developments since the original judgment, the balance has now swung in favour of allowing Appleby to act for Gamlestaden. We would summarise our reasons as follows:-
(i) We remain of the view expressed in para 35 of the July judgment (quoted at para 9 above). It is of the first importance to the reputation of Jersey as a jurisdiction where all parties can expect to obtain a satisfactory hearing before an independent and impartial tribunal (which process includes a need for adequate legal representation) that there should not be a perception that it is difficult or impossible to find lawyers of the appropriate calibre and stature to act against substantial financial institutions in the island. It would be a matter of injustice and damaging to the island's reputation if an over-zealous application of the law in this area led to a situation where there was a perception that clients wishing to sue local financial institutions could not obtain representation by firms of lawyers which they considered to be the match of the firm instructed by the financial institution.
(ii) We would of course emphasise that any such perception must be reasonable, but in our judgment Gamlestaden has acted and is acting reasonably in this matter. We accept without hesitation that there are advocates in medium and smaller firms who are perfectly capable of conducting heavyweight litigation with great skill. Many clients would indeed prefer to instruct such a firm in the hope, perhaps, of a more personal service. However, we cannot categorise as unreasonable a view amongst international financial institutions, such as the banks in this case, that they would wish, if possible, to instruct one of the five largest firms in a matter of this value, weight and complexity. We accept that, to such institutions, size is important because of the importance which they attach to depth of resources etc.
(iii) In many cases it will of course not be possible for such an institution to obtain representation from one of the five largest firms. For example, in a piece of litigation involving many different parties, all the larger firms might already be acting or might be conflicted. In those circumstances, such an institution would obviously have to retain a medium or smaller firm. However, given our assessment that it is not unreasonable for such an institution to wish to instruct one of the larger firms if possible, it is incumbent upon the Court to take that into consideration when deciding where the balance of justice falls in a particular case.
(iv) In this case, Gamlestaden originally instructed Crill Canavan. Following the decision of the Royal Court, inter alia , to dismiss the case for want of prosecution (although this decision was subsequently overturned by the Court of Appeal), they chose to move to Appleby, a larger firm. They were prevented from using Appleby by the decision of this Court contained in the July judgment. They then approached Firm A, which they considered to be of suitable size and reputation. However, that firm subsequently refused to act because RBC had expressed a preference that it should not do so. Subsequently Gamlestaden approached a leading advocate in a medium sized firm but he had a conflict of interest. We are satisfied that Gamlestaden has not stuck obstinately to Appleby but has made reasonable endeavours to find alternative representation. In the light of this history, it is not surprising that Gamlestaden should feel thwarted in obtaining representation by a legal firm which it considers to be the match of that retained by Abacus. It cannot presently be represented by any of the five commercial firms said to be in the first tier.
(v) We do not think it right to ignore the circumstances in which Firm A came to refuse to act for Gamlestaden. Firm A was originally willing to act and Gamlestaden was content with the size and stature of the firm. Yet, RBC then stated that it would prefer Firm A not to act for Gamlestaden and Firm A withdrew its agreement to act. There was no conflict of interest which required this; it was merely a question of preference by RBC. It might be thought somewhat rich, RBC having entirely for its own reasons effectively prevented Firm A from acting for Gamlestaden, for Abacus to insist that Gamlestaden should now make do with one of the three remaining firms which are smaller and which Gamlestaden considers to be of lesser stature.
(vi) Firm A is now willing to act for Gamlestaden, having received confirmation from RBC that it no longer has any objection to the firm so acting. However, Gamlestaden has now lost trust and confidence in Firm A and does not wish to be represented by a firm which put its commercial relationship with RBC ahead of its agreement to act for Gamlestaden. In the circumstances, we cannot possibly categorise Gamlestaden's attitude as being unreasonable and we accept therefore that Firm A is no longer a realistic option.
(vii) In the July judgment the Court found the matter to be finely balanced. It was not a case where relevant confidential information clearly existed in the hands of Appleby; nor was it even a case where there was a substantial risk that such information was present. In those circumstances as the Court said at paragraph 36 of the July judgment, the small size of the Jersey Bar would be unlikely to affect the outcome. In this case the assertions by Abacus were of a general unspecific kind and were based essentially upon the fact that the relationship with Appleby concerning the Y matters had been an intense and prolonged one. The Court concluded that there was a risk that the confidential information which was undoubtedly in Appleby's hands in connection with the Y matters might turn out to be relevant to the Baltic proceedings. As against that the Court was informed that there would be no difficulty in Gamlestaden obtaining alternative representation. In the circumstances the safe and prudent course was clearly to restrain Appleby from acting on the basis that no prejudice would be caused to Gamlestaden by such an order whereas there was a risk - albeit small - of prejudice to Abacus if Appleby were not restrained.
(viii) However, as the Court made clear in para 47 of the July judgment, had the evidence been that Gamlestaden was unable to obtain appropriate alternative representation, the Court would have regarded the importance of a claimant against a financial institution in Jersey being able to obtain adequate legal representation as outweighing the risk in this particular case of relevant confidential information being used against Abacus. We are satisfied that, given that RBC has effectively prevented Firm A from acting for Gamlestaden for its own commercial reasons, there will, if the Court maintains the prohibition on Appleby acting, be a reasonable perception on the part of Gamlestaden that it is not being allowed to obtain representation which it considers to be the match of that at the disposal of Abacus. For the reasons already given, we think that that would be a highly unsatisfactory situation which should be avoided if reasonably practicable. It is a question of balancing the two competing principles referred to earlier. Given the very general and unspecific nature of the confidential information said to be in the possession of Appleby in relation to the Y matters and given our finding that the risk of such information turning out to be relevant to the Baltic litigation only just crossed the threshold so as to justify restraining Appleby from acting, we have concluded that the need to allow Gamlestaden to have legal representation which it reasonably considers to be the match of the opposition now outweighs the small risk of relevant confidential information being in the possession of Appleby and being used against Abacus.
In all the circumstances we therefore remove the prohibition on Appleby acting for Gamlestaden in connection with the Baltic proceedings.
Authorities
Abacus (CI) and Others v Bisson and Others [2007] JRC 150 .
Les Pas Holdings Limited v Receiver General [1995] JLR 163 .
Jersey Evening Post Limited v Al Thani [2002] JLR 542 .
Companies (Jersey) Law 1991.