The Court of Appeal has affirmed a High Court decision that prevents solicitors' insurers from gaining access to privileged documents held by the Law Society after an intervention in the firm. In Quinn Direct Insurance Ltd v Law Society of England & Wales  EWCA Civ 805 the Court unanimously rejected Quinn's appeal against the decision of Mr Justice Peter Smith (see our previous blog here).
The facts of the case were that claims had been made by third parties against a two-partner firm regarding payments made out of the client account in connection with conveyancing transactions carried out by one of the partners. Quinn contended that these claims suggested dishonesty by that partner and declined to provide an indemnity to him on those cases. After the Law Society intervened in the firm and took possession of all its files, Quinn requested access to see whether there was evidence linking the other partner to the dishonest actions.
In the Court of Appeal, Quinn argued that as solicitors' professional indemnity insurers they were "meshed in" to the supervisory jurisdiction of the Law Society and the regulatory system under which it operates. The court disagreed, saying that insofar as they were "meshed in", it was only as the provider of indemnity insurance and not as the recipient of any services or information, let alone privileged information. Even if they were "meshed in" to such a degree as argued by Quinn, the request for documents was not made for any regulatory purpose and was "completely at odds with the regulatory role."
The Court of Appeal also gave four further arguments for rejecting the appeal:
- an insured solicitor is not bound to disclose to his insurer confidential or privileged information belonging to the client without consent;
- the solicitor has a duty of good faith towards his insurer, but the privilege remains that of his client and cannot be broken or waived without consent;
- even if the policy or the regulatory scheme obliged solicitors to disclose privileged material to insurers, and/or to the Law Society, there is no similar requirement for the Law Society to disclose to the insurer;
- while there may sometimes be a 'circle of confidence', for example between the Law Society and the Intervention Agent, there is no reason why it should include the qualifying insurer.