Insurance companies cannot enter the ‘circle of confidence’ between solicitors and clients in the hope of unearthing evidence from seized documents that would enable them to refuse indemnity, the Court of Appeal confirmed last week.

Upholding the High Court decision of Mr Justice Peter Smith in Quinn Direct v The Law Society, Chancellor of the High Court Sir Andrew Morritt said that there was ‘no reason’ why insurers should be allowed to enter this ‘circle of confidence’ by being granted access to privileged documents held by the Solicitors Regulation Authority following an intervention.

Morritt said that no public or regulatory objective would be served by disclosure in these circumstances.

The Law Society said solicitors are not obliged to disclose confidential or privileged information in the absence of a claim or waiver from the client.

The SRA had intervened into two-partner firm South Bank Solicitors. Quinn then applied to the court for access to all intervention documents held by the SRA, saying it needed access to decide whether or not it was obliged to indemnify one of the firm’s partners in connection with a number of claims (see news story).

Smith said at the time that ‘the whole purpose of the present application… is merely an attempt to gather evidence… to enable [Quinn] to refuse an indemnity.’