Simmons & Simmons arriving at the mediation.
Simmons & Simmons has successfully defended itself after it unwittingly threatened one client on behalf of another, because a partner missed a conflict check.
Alex Ainley, a Simmons partner specialising in financial regulation, agreed in March 2022 to advise Bank of London Group, a start-up clearing bank, on the legal requirements it would need to fulfil to enter the market.
Ainley hoped that completing an initial task quickly would impress the Bank of London and lead to a long-standing relationship, so he started work before sending an engagement letter or completing the client onboarding process, telling the court that it was "not unusual" to begin non-contentious and non-transactional matters before the onboarding process was finalised.
Unfortunately for Ainley, the firm's trademarks practice had been acting for Bank of London and The Middle East Plc (BLME) on a claim against Bank of London Group since December 2021. Simmons did conduct a conflicts check when Ainley began advising Bank of London, but the partner failed to spot the relevant email in his inbox.
A few weeks later Bank of London received correspondence from Simmons & Simmons, but not the kind it was expecting. Instead of an update from Ainley on the bank's regulatory position, it was a threat to sue Bank of London for passing itself off as BLME, along with a demand that it immediately cease using its name.
Two weeks later Bank of London Group issued a claim against Simmons, demanding that it stop acting for BLME and seeking to restrain the fiirm from misusing allegedly confidential information about its business. Bank of London feared material held by Simmons would be passed to BLME and then to Lloyds, a rival in the clearing market business with which Lloyds had a relationship.
But in the High Court, Stuart Isaacs KC, sitting as a deputy judge, ruled that the confidential nature of the information wasn't relevant. He factored in the short length of time Ainsley had been working for Bank of London, and the fact Simmons fees "over a limited period amounted to the very modest sum of £5,435 (plus VAT)".
Isaacs said he was also satisfied that there was no real risk of disclosure of Bank of London's information to BLME. As soon as Ainley became aware of the conflict, he asked the IT department to lock down Bank of London's electronic file, so only he could access it.
Although no Chinese wall had initially been erected, Ainley and his team working for Bank of London testified that they had not discussed the matter with the trademark team acting for BLME, and the trademark team testified that they had not received any contact in respect of the Bank of London matter.
"Any criticism of the defendant's approach to the situation cannot be sustained", said Isaacs. "No challenge is made to the integrity of the solicitors" at Simmons & Simmons, "and considerable weight should be attached to those statements".
In a statement Simmons told RollOnFriday, "We are pleased with the ruling and believe the Court made the right decision". [translation: Thank God for that!]
It continued, "At Simmons we take client confidentiality very seriously and have well-established procedures and policies in place to ensure security and confidentiality at all times." [Our conflict procedures are well-established if only certain people didn't skip over internal emails because they look boring.]
The firm added, "We were always confident that the judge would reject the claim from Bank of London" [You never really know which way a judge is going to go and we have been praying solidly for six months], and that he would "establish that the firm had taken all required steps to protect the bank's confidential information." [We keep client information so confidential some of us don't even know who we're acting for, and you can take that to the bank.]