High Court forces top City firm to hand over client’s confidential contact details

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By Legal Futures

2 September 2011

High Court: ordering disclosure of asset information would set unwelcome precedent

The High Court has forced a leading City law firm to hand over the confidential contact details of a client to the other side in a civil action.

However, it has blocked an effort to make Clyde & Co also reveal what it knows about the client’s assets.

The firm is acting for Syrym Shalabayev, a defendant in a major action by Kazakhstan’s JSC BTA Bank to recover alleged losses suffered under previous management. Mr Shalabayev – whose whereabouts are unknown – has been found in contempt of court for failing to comply with disclosure obligations in a worldwide freezing order.

In June he was sentenced to two concurrent terms of 18 months’ imprisonment and one concurrent term of six months. He has not yet been apprehended, leading the bank to seek information from Clyde & Co.

Clydes partner Julian Connerty told the court that he did not know where his client was but was able to make contact with him, “albeit not always very easily”. Mr Shalabayev had asked him to keep his contact details confidential because he fears for his and his family’s safety.

Distinguishing between privileged and confidential information, Mr Justice Henderson ordered the firm to hand over the contact details because the primary purpose was to aid enforcement of the committal order; without it he would probably not have agreed.

He said: “All reasonable efforts must now be made to ensure that Mr Shalabayev is apprehended so that he can begin to serve his sentence. It is in the highest degree unsatisfactory that he can still be at large, as a fugitive from justice, while he has solicitors on the record acting for him, and intervening in legal proceedings as and when it suits his purposes.

“Such a procedure is liable to bring the administration of justice into disrepute, and to give the impression that British justice is an a la carte menu from which he can order at choice without ever having to pay the bill.”

He said committal to prison would ensure Mr Shalabayev’s safety, and there was no evidence to suggest that discovery of his whereabouts would place his family at any greater risk than they already face.

However, the judge refused to order Clydes to disclose information relating to Mr Shalabayev’s assets, primarily because it was privileged and to do so would also inhibit his right to seek legal advice.

He added: “More generally, I have a real concern that if I were to grant the order sought, it would soon become standard practice for claimants like the bank, in whose favour unsatisfied disclosure orders have been made, to bring similar applications against the solicitors of the defaulting party. That is a prospect which I can only view with dismay, and I think it is no accident that counsel for the bank were unable to show me any reported case where such an order, or anything like it, has ever been made.”

Mr Connerty did not respond to requests for comment.

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