Case No: B2/2001/2186
Neutral Citation Number : [2002] EWCA Civ 723
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIS HONOUR JUDGE MADDOCKS
SITTING AS A DEPUTY JUDGE IN THE CHANCERY DIVISION

Royal Courts of Justice
Strand, 
London, WC2A 2LL

Wednesday 22nd May 2002
Before :

THE VICE-CHANCELLOR
LORD JUSTICE JUDGE
and 
LORD JUSTICE JONATHAN PARKER

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Between :

	HILTON	Appellant	
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	BARKER BOOTH & EASTWOOD	Respondents	

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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040,  Fax No:  020 7831 8838
Official Shorthand Writers to the Court)
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Mr. Charles Machin (instructed by John Budd & Co) for the Appellant
Mr. Christopher Gibson QC and Mr. Ian Wood  (instructed by James Chapman & Co) for the Respondents

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Judgment
As Approved by the Court

Crown Copyright ©

The Vice-Chancellor  : 

1.	The defendants (“BBE”) are a firm of solicitors.   They were retained by Mr Neil Bromage to conduct his defence to the offences of participating in the management of a company whilst an undischarged bankrupt, of fraudulent trading and of obtaining credit whilst a bankrupt of which he was convicted on 30th October 1999 and sentenced to 9 months imprisonment.   The partner in charge of the conduct of those proceedings on behalf of Mr Bromage was Mr Kevin Gorman. 
2.	Following his release from prison in March 1990 Mr Bromage proposed to the claimant, Mr Hilton, that Mr Hilton should acquire land at 74 Waterloo Road, Ashton, Nr Preston, Lancs, build a block of six flats on it and sell such flats to Mr Bromage as and when they were completed.   Mr Bromage and Mr Hilton went to see Mr Gorman for advice on three occasions in July or August 1990.   On the last occasion Mr Gorman told Mr Hilton that he could not act for both Mr Bromage and Mr Hilton and suggested that Mr Hilton should instruct Mr Barry Scott.   Mr Scott was then a junior employee of BBE.   Mr Hilton did as Mr Gorman suggested.
3.	On 10th September 1990 three contracts were exchanged.  The first was for the purchase by Mr Hilton of the land at 74 Waterloo Road from the then owners for £85,000.   The second was for the purchase of the flats when built by Mr Bromage from Mr Hilton for an aggregate sum of £351,000.  The third, of which Mr Hilton was unaware, was for the resale of the flats by Mr Bromage to a Mr Riley for £390,000.
4.	The purchase of the land by Mr Hilton and the building of the six flats were completed on 8th October 1990 and 20th November 1991 respectively with, in each case, money borrowed by Mr Hilton from his bank.   By the latter date Mr Riley had disappeared and Mr Bromage was unable to complete his purchase from Mr Hilton.   On 10th January 1992 the contract between Mr Hilton and Mr Bromage was rescinded and BBE ceased to act for Mr Hilton.
5.	From Mr Hilton’s point of view the transaction was a disaster.  In September 1992 he was obliged to make proposals to his creditors for an individual voluntary arrangement.  The proposals were approved by the creditors in November 1992 but the IVA failed and was determined by the supervisor in November 1994.   In February 1994, the bank, as mortgagee, sold the flats for £180,000.   This was much less than what Mr Hilton had spent in the purchase and development of the land.
6.	In the meantime, in December 1993, Mr Hilton commenced these proceedings against BBE for damages for negligence and breach of duty.   He claimed that he had retained BBE to advise him in relation to the transactions and had entrusted them with implementing the necessary conveyancing formalities.   He complained that BBE had failed to tell him of Mr Bromage’s convictions and that he had only recently been discharged from prison and bankruptcy.   He alleged that BBE should have advised him of the substantial risks inherent in entering into the contract with Mr Bromage.   He asserted that had he been so informed and advised he would not have entered into either of the first two contracts to which I have referred, would not have borrowed the money needed to acquire and develop the land, would not have sustained the considerable losses arising from having done so and would not have been obliged to enter any arrangement with his creditors.
7.	The action came before His Honour Judge Maddocks, sitting as a deputy judge of the Chancery Division, in September 2001.   He concluded that had Mr Hilton been told of Mr Bromage’s recent past he would not have entered into either of the first two contracts.   But he also held that it would have been a gross breach of the duty owed by BBE to Mr Bromage if Mr Gorman had so informed Mr Hilton.   In those circumstances Judge Maddocks considered that the breach of the duty owed by BBE to Mr Hilton was in continuing to act for him, not in failing to pass on the information about Mr Bromage and continued:
“Upon that footing, Mr Hilton was entitled to be placed, and is entitled to be placed, in the position he would have been if he had instructed an independent solicitor.   The claim was not advanced that any such solicitor would have been aware or would have become aware of Mr Bromage’s conviction, nor was it suggested that he should have advised Mr Hilton to have a credit report.   In short, Mr Scott acted in the same way as would such an independent solicitor.   It must follow that no loss was caused by the breach of duty.”
8.	The judge then considered, on the assumption that his conclusion was wrong, that Mr Hilton would be entitled to recover £175,335.   In the event the judge gave judgment for BBE with costs but gave Mr Hilton permission to appeal.
9.	On this appeal Mr Hilton contends that Judge Maddocks was wrong to have concluded that the only breach of duty committed by BBE was that which he identified.   Mr Hilton contends that BBE were also obliged to disclose the information in their possession concerning Mr Bromage’s recent past once they decided to act for Mr Hilton as well as Mr Bromage.    He contends that a failure to perform this duty cannot be excused by the further breach of duty arising from BBE continuing to act for both Mr Bromage and Mr Hilton.  This is the only issue for our determination because it is agreed that if we allow the appeal the amount of damages should be remitted to the judge for further assessment.
10.	Thus the issue lies in a fairly small compass: does a solicitor who acts for both parties to a transaction owe to one of those parties a duty to communicate to him relevant information concerning the other party obtained by the solicitor under an earlier retainer from the latter party only?    
11.		It is not disputed that BBE failed to observe the Solicitors’ Professional Conduct Rules in acting for both Mr Bromage and Mr Hilton.   Their conduct in that respect spanned two versions of the Rules, those of 1988 and of 1990.    As the judge observed Rule 6 in both versions was to the same effect and prohibited a solicitor from acting for both vendor and purchaser.  Though there are exceptions from the general rule none applied in this case.   Likewise it is common ground that for BBE to have given to Mr Hilton relevant information about Mr Bromage’s recent past would have been a breach of BBE’s duty to Mr Bromage, notwithstanding that his conviction and bankruptcy were matters of public record and so not confidential in any strict legal sense. 
12.		Counsel for Mr Hilton, in submitting that the judge was wrong, drew our attention to a number of authorities to which I should refer.   In Moody v Cox [1917] 2 Ch.71 Hatt was, as trustee of the settlement which owned the relevant property, a vendor thereof to Moody as well as a solicitor acting for both vendors and purchaser.   The other defendant, Cox, was the other trustee and vendor as well as being Hatt’s managing clerk.    Both Cox and Hatt knew of valuations of the property which indicated that Moody was paying too much for it but did not disclose them.   Moody sought to rescind the contract on the ground, amongst others, of non-disclosure.  The defence was that the duty of confidence owed by the vendors as trustees to the beneficiaries under the settlement precluded and excused them from doing so.   This defence was rejected by all three members of the Court of Appeal.  At p. 81 Lord Cozens-Hardy MR said
 “A solicitor may have a duty on this side and a duty on the other, namely a duty to his client as solicitor on the one side and a duty to his beneficiaries on the other; but if he chooses to put himself in that position it does not lie in his mouth to say to the client "I have not discharged that which the law says is my duty towards you, my client, because I owe a duty to the beneficiaries on the other side."  The answer is that if a solicitor involves himself in that dilemma it is his own fault.  He ought before putting himself in that position to inform the client of his conflicting duties, and either obtain from that client an agreement that he should not perform his full duties of disclosure or say - which would be much better - "I cannot accept this business."
13.	Warrington LJ at p. 85 held that
 “It affords no answer at all.  I will assume that he [Moody] knew that it was Hatt's duty to do the best he could for his cestuis que trust.  Of course he would but he did not know that there were any facts the disclosure of which would reduce, or tend to reduce, the purchase price to be required.  How could he possibly know that he was not to expect that Hatt would do his duty to him?  It seems to me that Hatt has placed himself in a position in which he might possibly have been open to attack by his cestius que trust, if he had done his duty to Moody, but that is no answer to Moody, who says, "You have not done your duty to me."
14.	Scrutton LJ was of the same opinion.   At p.91 he said
 “It may be that a solicitor who tries to act for both parties puts himself in such a position that he must be liable to one or the other, whatever he does.  The case has been put of a solicitor acting for the vendor, and purchaser who knows of a flaw in the title by reason of his acting for the vendor and who, if he discloses that flaw in the title which he knows as acting for the vendor, may be liable to an action by his vendor, and who, if he does not disclose the flaw in the title, may be liable to an action by the purchaser for not doing his duty as solicitor for him.  It will be his fault for mixing himself up with a transaction in which he has two entirely inconsistent interests, and solicitors who try to act for both vendors and purchasers must appreciate that they run very serious risk of liability to one or the other owing to the duties and obligations which such curious relation puts upon them.”
15.	The Court of Appeal agreed with the judge that Moody was entitled to rescind the contract for material misrepresentation arising from breach of his duty to disclose.    In that case the duty arose from the fiduciary relationship between the purchaser, Moody, and his solicitor and vendor Hatt and the presumption of undue influence in consequence of the fact that Hatt was not only Moody’s solicitor but a vendor to him.   No such relationship is relied on in this case.
16.		In Mortgage Express Ltd v Bowerman & Partners [1996] 2 AER 836 a solicitor acted for both lender and borrower in a mortgage transaction.   He became aware that the borrower was buying from one who was acquiring the property simultaneously with selling it but at a significantly reduced price.   He did not disclose this fact to the lender, the borrower defaulted and the property was sold for much less than the purchase price or the loan.   The lender sued the solicitor for damages for negligence and breach of duty.    The judge concluded that the solicitors were liable.  Their appeal was dismissed.   Sir Thomas Bingham MR said (p.841)
 “Where a solicitor acting for purchaser and lender receives information common to both the question whether he should pass it on to one client or the other or both or neither depends entirely on the relevant interest of each client which the solicitor is engaged to serve.”
17.	He accepted the proposition (p.842) that 
 “If in the course of investigating title a solicitor discovers facts which a reasonably competent solicitor would realise might have a material bearing on the valuation of the lender’s security or some other ingredient of the lending transaction, then it is his duty to point this out.”
18.	Millett LJ agreed with that formulation.   He pointed out that in that case there was no question of conflict of interest.   He observed that (p. 844)
 “A solicitor who acts both for a purchaser and a mortgage lender faces a potential conflict of duty.   A solicitor who acts for more than one party to a transaction owes a duty of confidentiality to each client, but the existence of this duty does not affect his duty to act in the best interests of the other client.”
Millett LJ made similar statements in Bristol and West BS v Mothew [1998] Ch.1, 18-20.
19.		It is to be noted that in both Bowerman and Mothew the relevant information came to the knowledge of the solicitor  in the course of the transaction in which he acted for both parties.     The statements of Sir Thomas Bingham MR and Millett LJ must be read in that context.
20.	In Bristol and West BS v May, May and Merrimans [1996] 2 AER 801 Chadwick J was concerned with the extent to which solicitors acting for both borrower and mortgage lender are obliged to disclose to the lender facts which, had they not been acting for the borrower as well, they would have been unlikely to know.   He concluded (p.814) that only information obtained in the course of investigating title or in preparing for completion which a reasonably competent solicitor would realise might be of significance to his client ought to be disclosed to him.   With regard to the fiduciary relationship between a client and his solicitor Chadwick J recognised that (p.815) the scope of the fiduciary duty depended on the terms of the retainer but, applying Moody v Cox, could not be cut down by virtue of the fact that the solicitor is, to the knowledge of one party, acting as solicitor also for the other.
21.	The more limited principle recognised in Bristol and West BS v May, May and Merrimans has been further applied and refined in a series of subsequent mortgage lending cases.  Thus, in Bristol and West BS v Baden, Barnes and Groves [2000] Lloyds Reports PN 788 Chadwick J considered that solicitors acting for both borrower and mortgage lender were not bound to disclose to either information relevant to the lending risk which came into his possession independently of any work he was instructed to do.  He cited as an example of what the common solicitor was not obliged to disclose information which has come into his possession as a result of an earlier transaction in which he acted only for the person to whom the information related.  He added
“To impose on the solicitor the obligation to inform the building society of everything that he knows – including matters which he knows as a result of acting for the borrower in the past – which might affect the lending decision which the Society has to make would, in my view, be oppressive and unrealistic.”
22.	He saw no such objection to the more limited obligation he upheld.  This view was shared by Millett LJ in refusing permission to appeal (see Nationwide BS v Balmer Radmore [1999] Lloyds Reports PN 241, 263.), in relation to confidential information by the Court of Appeal in Darlington BS v O’Rourke [1999] PNLR 365, 371, and by Blackburne J in Nationwide BS v Balmer Radmore.
23.	The dictum of Chadwick J in Bristol and West BS v Baden, Barnes and Groves [2000] Lloyds Reports PN 788, 791 may, I diffidently suggest, be too wide.   It appears to  contemplate that a solicitor acting for both borrower and mortgage lender is under no obligation to disclose to either party non-confidential information which came into his possession before and independently of any work he was instructed to do.   The point does not arise in this case, but I should have thought that it was the obligation of the solicitor to advise both clients of any non-confidential matter relevant to the intended transaction of which he already knew. 
24.		The principles applied in Mortgage Express Ltd v Bowerman & Partners, Bristol and West BS v May, May and Merrimans, Bristol and West BS v Baden, Barnes and Groves, Darlington BS v O’Rourke and Nationwide BS v Balmer Radmore do not assist Mr Hilton.   His counsel sought to distinguish them on the basis that each was concerned with a solicitor who acted for both borrower and mortgage lender, not, as in this case, with vendor and purchaser.    He submitted that such a distinction is justified by the terms of s.199 Law of Property Act 1925 which, he suggested, is more commonly relevant to a mortgage transaction than one of vendor and purchaser.
25.	I do not accept that s.199 justifies a distinction in this context between mortgage lending and sales of land.   So far as relevant s.199(1)(ii), which reproduced s.3 Conveyancing Act 1882, restricts the notice of any fact or thing which may be imputed to a purchaser from his solicitor or other agent to that which the solicitor or other agent acquired “as such” and in the same transaction.   The doctrine of notice concerns priorities between competing interests in property not the ambit of any duty of disclosure owed by a solicitor or other agent at common law.
26.	Counsel for Mr Hilton also suggested that cases of mortgage lending may be more readily distinguished because solicitors act for both borrower and lender more commonly than for vendor and purchaser.   Assuming that is the case, I do not see why that should lead to a difference in a solicitor’s duty of disclosure.  If a distinction is to be drawn it must be between cases when the solicitor may and when he may not act for more than one party to a transaction whether it is a mortgage loan or a sale.
27.	Counsel for BBE referred us to National Home Loans Corpn v Giffen Couch & Archer [1997] 3 AER 808.   In that case the solicitors acted for both borrower and mortgage lender but the instructions from the latter were both explicit and limited.  The mortgage lender claimed that the solicitor had not disclosed information he had obtained casting doubt on the borrowers’ ability to repay the loan.   The Court of Appeal concluded that there was no obligation to do so.  Peter Gibson LJ, with whom Hobhouse and Leggatt LJJ agreed, noted that the extent of the duty of the solicitor depended on the terms and limits of his retainer.  He concluded that there was no obligation to disclose the information to the lender as it related to matters outside those which the solicitors were instructed to investigate and outside the limited class of information referred to in Mortgage Express Ltd v Bowerman & Partners.
28.	From these cases I deduce the following propositions: (1) a solicitor’s duty of disclosure depends on the nature and terms of his retainer, Mortgage Express Ltd v Bowerman & Partners [1996] 2 AER 836 and National Home Loans Corpn v Giffen Couch & Archer [1997] 3 AER 808, (2) a solicitor is under no obligation (quite the reverse) to disclose to a later client confidential information obtained under an earlier retainer from a former client, Bristol and West BS v Baden, Barnes and Groves [2000] Lloyds Reports PN 788 and Darlington BS v O’Rourke [1999] PNLR 365, (3) if a solicitor acts for more than one party to a transaction then he may be obliged to disclose information obtained in that transaction from one of them to the other, Mortgage Express Ltd v Bowerman & Partners [1996] 2 AER 836 and (4) in that event he cannot excuse his breach of duty to either of them by reference to the duty he owes to the other, Moody v Cox [1917] 2 Ch.71 and Mortgage Express Ltd v Bowerman & Partners [1996] 2 AER 836.
29.	The authorities to which I have referred do not support the proposition advanced by counsel for Mr Hilton that BBE were under a duty to disclose to Mr Hilton what they knew of Mr Bromage.   Nor do I find that in any way surprising.  When Mr Bromage retained BBE to conduct his defence to the criminal charges of which he was convicted he did so on the conventional basis that BBE would not disclose to others confidential information which had come to their knowledge while so acting.   Any suggestion at that stage that there should be an exception in favour of any later client of BBE if disclosure were necessary to enable BBE properly to advise the latter would have been indignantly repudiated by Mr Bromage;  and no less so if the relaxation were limited to later clients for whom BBE acted concurrently with Mr Bromage in relation to a transaction between them.   Accordingly it is impossible to imply any such term into the contract of retainer between Mr Bromage and BBE at the time of Mr Bromage’s prosecution.
30.	It was not suggested in this case that Mr Bromage had waived his rights against BBE by taking Mr Hilton to see Mr Gorman in connection with the purchase, development and resale of 74 Waterloo Road.   Though a theoretical possibility it would have to be affirmatively established by the party who alleged it.   It was neither alleged nor proved in this case.
31.	At the trial BBE contended that the instructions from Mr Hilton were limited to the implementation of a concluded deal by the requisite conveyancing documents.   The suggested consequence was that the information relating to Mr Bromage was not relevant to anything BBE were instructed to do for Mr Hilton.   This was rejected by the judge.   It follows that to some extent at least during the first two meetings BBE had been instructed by Mr Hilton to advise on the proposed deal as he alleged in paragraph 4 of his Statement of Claim.   Thus the information BBE possessed with regard to Mr Bromage was relevant to the task they were instructed to perform;  but given the prior obligation of BBE to Mr Bromage BBE were unable properly to carry out their instructions from Mr Hilton.   It is not disputed that BBE should have told Mr Hilton that they were unable properly to act for him.  They did not do so until too late and are liable to him for breach of contract.
32.		I do not accept that BBE were also in breach of a duty to disclose to Mr Hilton what they knew of Mr Bromage.    Just as the retainer of BBE by Mr Bromage in connection with his prosecution was not subject to some implied limitation by reference to disclosure to later clients so the retainer of BBE by Mr Hilton must be subject to an implied exclusion from any general duty of disclosure of that which they are legally obliged to treat as confidential.  In my view such an exclusion satisfies all the well-known tests for the implication of contractual terms.   Such an exclusion does not impinge on the solicitor’s duty to do the best for his client;  rather it demonstrates the importance of performing that duty promptly by informing the client that he cannot act for him.   
33.	Thus it is not a question of two irreconcileable duties, to which the principles of Moody v Cox would apply, but of one being modified to take account of another.  It is true that in Moody v Cox the duty to the beneficiaries preceded the transaction in which Hatt acted for Moody as well as himself.   But that case concerned the breach of a fiduciary duty and presumption of undue influence arising on the sale of property by a solicitor to his client to which different considerations apply.
34.	Once it is established that BBE were under no duty to disclose to Mr Hilton what they knew of the background of Mr Bromage then the problem is to identify what damage was sustained by Mr Hilton in consequence of the breach by BBE of its duty to advise Mr Hilton to instruct other solicitors.   Unless Mr Hilton could demonstrate that had he instructed other solicitors he would have found out what BBE knew but could not tell him then he cannot prove any loss.   No such evidence was adduced and no such assumption could be made by the judge.   In my view the judge was right and the appeal should be dismissed.
Lord Justice Judge:
35.	This appeal demonstrates yet again the dangers of  a firm of solicitors acting for two clients with separate, probably inconsistent, and certainly competing interests.
36.	The facts are set out in the Vice Chancellor’s judgment. In summary, the solicitors, Barker, Booth and Eastwood (“BBE”), through one of their partners, Mr Gorman, were retained by Mr Bromage to act for him in criminal proceedings. The principle of confidentiality, that is, Mr Bromage’s privilege against disclosure, which it was open to him but not his solicitors to waive, applied to every aspect of those proceedings. And in my judgment, it continued to apply not only during but after the conclusion of the criminal proceedings, and will indeed survive his death. (re Patrick Molloy, deceased (1997)2CAR283). In my judgement, the privilege was undiminished when, subsequent to the criminal proceedings, Mr Bromage  retained Mr Gorman as his solicitor for the purposes of a commercial transaction quite unconnected with and irrelevant to them.
37.	As a further result of the retainer, BBE accepted an additional obligation to Mr Bromage, sufficiently summarised for present purposes as a duty to communicate material information.This obligation was not absolute. Mr Bromage was not entitled to be given information about any other client of BBE, coming to BBE within the confidentiality principle, whether before or after Mr Bromage became their client. 
38.	Mr Hilton was also a long standing client of the firm. Naturally enough, he retained the firm to act for him in connection with his business transaction with Mr Bromage. The duty of confidentiality owed to Mr Hilton was not partial, nor diluted by the existing obligations owed by the firm to Mr Bromage, but the duty to communicate to him was circumscribed in precisely the same way.  It did not extend to information obtained in circumstances where a duty of confidence was owed to Mr Bromage. 
39.	Accordingly, by way of example for the purposes of illustration only, if in their earlier dealings with Mr Hilton as a client, or in connection with this particular transaction, BBE had become aware of facts disadvantageous, but not in any sense discreditable to Mr Hilton, say, that he was unwell, and therefore from Mr Bromage’s point of view, not perhaps the best person with whom to enter into a major commercial relationship, the duty owed to Mr Hilton would have required silence, and the preservation of his confidentiality.  Absent any express arrangements, and none occurred here, the interests of the first client whether generally, or in connection with this particular transaction, were not entitled  to be served first. While both remained clients, each had an equal priority, and was entitled to the same standard of  loyal observance of the duties owed to each, up to, but not beyond their full ambit. In the context of the fiduciary relationship between solicitors and beneficiaries, this principle  was expressly confirmed in Moody v Cox (1917) 2Ch.71.  In my view, the principle is apt to cover the ordinary retainer as well. (see Mortgage Express Ltd v Bowerman & Partners (1996) 2AER836). 
40.	Mr Gorman believed that his professional relationship with Mr Bromage prevented him from disclosing Mr Bromage’s troublesome antecedents to Mr Hilton. If that were the single question to be answered, Mr Gorman would have been right. But it was not. By loyally fulfilling the obligation of confidentiality to Mr Bromage, BBE were simultaneously acting contrary to Mr Hilton’s best interests, and by retaining him as their client, they restricted his opportunity to discover the unpalatable facts about Mr Bromage from sources which were not bound by the same obligation of confidentiality. In short, the best interests of one client were prejudiced to the advantage of the other. That was impermissible, whichever client was  favoured. 
41.	Mr Gorman’s  failure to act in breach of his continuing duty to Mr Bromage could not found a cause of action against BBE by Mr Hilton. Equally, Mr Gorman was not entitled to form his own judgment about which of two  clients would suffer least from any  breach of duty, and so, identify, and then purport to justify the breach of his obligations to one of  them. The short and obvious answer to this case is that Mr Gorman (or BBE) should have asked either Mr Hilton, or Mr Bromage, to retain new solicitors. 
42.	Mr Hilton’s cause of action arose because BBE continued to act both for him and Mr Bromage. Their failure to ask him to consult fresh solicitors renders them liable for consequent damage. Such damage had to be established. The judge approached this problem by considering whether, if Mr Hilton had retained new solicitors, the new solicitors, acting with reasonable competence, would have been expected to discover the disturbing features about Mr Bromage’s antecedents.  The judge could not make any favourable assumptions on this issue: the question had to be answered evidentially. We would not be justified in interfering with his conclusion that consequent damage was not proved. 
43.	For these reasons I agree with the Vice Chancellor that the appeal should be dismissed.  
Lord Justice Jonathan Parker LJ : 
44.	I agree that this appeal should be dismissed, for the reasons which the Vice-Chancellor has given.
45.	In the course of acting for Mr Bromage under a previous retainer, information came into the defendants’ hands concerning Mr Bromage’s personal affairs.   On this appeal, Mr Machin (for Mr Hilton) rightly conceded that the defendants were under a continuing duty not to disclose that information to third parties (including other clients of the defendants) without Mr Bromage’s consent.   It follows that the defendants remained under that duty of non-disclosure when they agreed to act for Mr Hilton.    That being so, the defendants ought to have refused to act for Mr Hilton, and they were in breach of duty in failing to do so.   However, on the evidence (or lack of it) before the judge, his conclusion that that breach of duty caused no loss seems to me to have been inevitable.   
46.	So the question arises whether the defendants, in acting for Mr Hilton, owed a duty to him to disclose the information in question.   If they did owe such a duty there can be no doubt that they breached it, since it is well settled that a solicitor who owes conflicting duties cannot pray in aid the existence of one duty as a defence to his failure to discharge the other: Moody v. Cox [1917] 2 Ch 71 CA.    Equally, there can be little doubt that Mr Hilton suffered loss as a result of the non-disclosure.
47.	In my judgment, however, there is no duty on a solicitor to disclose to a client confidential information obtained from another client, save with the informed consent of the other client; and any term to contrary effect in a solicitor’s contract of retainer would in my judgment offend against public policy.  This is clear, in my judgment, from the decision of the Court of Appeal in Mortgage Express v. Bowerman [1996] 2 All ER 836.   At p.842d-e Sir Thomas Bingham MR said:
“A client cannot expect a solicitor to undertake work he has not asked him to do, and will not wish to pay him for such work.   But if in the course of doing the work he is instructed to do the solicitor comes into possession of information which is not confidential and which is clearly of potential significance to the client, I think the client would reasonably expect the solicitor to pass it on and feel understandably aggrieved if he did not.”  (My emphasis.)
48.	In Bristol & West Building Society v. Baden Barnes Groves & Co [2000] Lloyds Rep PN 788, Chadwick J considered that the words “if in the course of doing the work he is instructed to do” in the above quotation placed an important restriction on the solicitor’s duty of disclosure, such that it would exclude from that duty non-confidential information acquired outside the confines of the particular transaction.    For my part, I share the Vice-Chancellor’s doubt as to whether the Master of the Rolls intended to indicate any such restriction on the duty of disclosure.   I find it difficult to see why the duty should be so restricted.   However, in the light of Mr Machin’s concession the point does not arise in the instant case, and I accordingly say no more about it.
49.	The result, in my judgment, is that the defendants were under no duty to Mr Hilton to disclose information to him, the disclosure of which would breach of their continuing duty of non-disclosure to Mr Bromage.   Accordingly the judge was right to find that the only breach of duty which the defendants committed towards Mr Hilton was their failure to refuse to act for him.
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THE VICE-CHANCELLOR:  For the reasons given in the written judgment, which has been handed down, the appeal is dismissed, the parties having reached agreement as to the form of order that should be pronounced.  In consequence we will make an order in that form, which, as signed by counsel, I will now hand to the associate.