A HIGH Court judge has called on the Law Society of Scotland and other legal professional bodies to “reflect” on their codes of conduct after a case in which a lawyer represented a client only for his firm to be merged into a new large legal company that represented the other side.

In a dissenting judgment, Lord Malcolm disagreed with Lords Bracadale and McGhie in the case of Ecclesiastical Insurance Plc against Lady Iam Hazel Virginia Whitehouse-Grant-Christ.

She had formally objected on grounds of confidentiality to the law firm BLM representing Ecclesiastical at a previous court hearing in the long-running case, which concerns an insurance claim following a fire that destroyed Whitehouse-Grant-Christ’s art gallery in a converted church in Banffshire in 2000.

Whitehouse-Grant-Christ’s first solicitor on the case was George Moore, now a QC, who had then worked with HBM Sayers, and with whom she dealt for six weeks. HBM Sayers merged with Berrymanss Lace Mawer in 2014 to form BLM, the firm that took over representing Ecclesiastical Insurance last year.

It was stated in court that Moore continues to work as a consultant for BLM, and the bench of three judges at the Court of Session split two to one in favour of BLM being allowed to continue to represent the insurer.

Lord Malcolm stated in his minority opinion: “The question posed in this application is as follows — can a firm of solicitors act for a party in a litigation, and then, that retainer having ended, at a subsequent stage accept instructions from the former client’s opponent in the same proceedings?

“All the judges who have had any involvement have entertained immediate concerns. Intuitively, it seems wrong. While not excluding the exceptional case, for my part I am of the view that it would be a sound general rule if a firm of solicitors, having acted on one side of a litigation, was disabled from thereafter changing sides. I would apply such a rule to the present case.”

He added: “I would expect any litigant to be unhappy if a firm of solicitors who had formerly acted for them, at a later stage of the same proceedings advised and represented the other side; and this no matter that a court was persuaded that there was no real risk of a disclosure of confidential information.

“In such circumstances, no amount of assurances or undertakings are likely to satisfy the former client, who might well, especially if ultimately unsuccessful, harbour suspicions and a grievance, and form a poor impression as to the fairness and integrity of the judicial and regulatory processes.”

Lord Malcolm concluded: “Whatever else, this case may prompt the professional bodies to reflect on their codes of conduct.”

Refusing the motion for BLM to withdraw from the case, Lord McGhie stated: “The firm BLM was aware of the potential problem in connection with this case before they agreed to take it over. They discussed the matter in very general terms with an official of the Law Society of Scotland.

“They were told that issues of conflict depended on specific circumstances. They took advice from senior counsel as to the propriety of accepting instructions in the present case. He gave advice to the effect that there was no legal bar on doing so. It is not clear whether counsel was asked to advise on the practical sense of doing so. The court was not told what part the pursuers themselves played in these discussions.”.

Lord McGhie had been told by Nick Ellis QC for Ecclesiastical that “there was no risk of casual or accidental disclosure.”

Elllis added that BLM were responsible solicitors and had given an assurance that the few documents still held by them contained nothing of any relevance.

Lord McGhie said it was accepted there is no continuing obligation of loyalty in the present case “and indeed that, unless there are special circumstances, there is no such duty on termination of a normal agency.”

Lord Bracadale agreed with Lord McGhie stating: “I do share the concerns expressed by all the judges who have considered the defender’s motion. On any view, this is an area in which great care must be taken by solicitors, particularly in the era of mergers of firms of solicitors.”

A spokesman for the Law Society said it had very strong rules to prevent conflict of interest but these were currently under review.