Those for whom multi-disciplinary partnerships (MDPs) are a matter of urgency, should take note of last week's House of Lords decision in the case involving the accountancy giant KPMG and His Royal Highness Prince Jefri Bolkiah.

The Lords upheld an injunction granted by Mr Justice Pumfrey in the High Court preventing KPMG from working on an investigation ordered by the Sultan of Brunei into how the Brunei Investment Agency (BIA) was run when it was headed by Prince Jefri, the Sultan's estranged brother.The facts were straightforward.

Prince Jefri had been originally chairman of the BIA.

In 1996, he was involved in litigation with two brothers named Manoukian.

In the context of that litigation, he asked his accountants, KPMG, to undertake forensic investigations on his behalf.After Prince Jefri's litigation against the Manoukians had been resolved, he subsequently became the subject of a dispute with the BIA.

The BIA in turn asked KPMG to investigate certain matters on its behalf which potentially put the accountancy firm into a conflict of interest given its duty of confidentiality to Prince J efri in relation to the Manoukians litigation.

KPMG wrestled with the issue for some time but concluded that it would be able to act for the BIA.

Prince Jefri, not unnaturally, objected.The matter eventually had to be resolved by the court.

Mr Justice Pumfrey, after hearing both sides, concluded that KPMG should be restrained from acting on behalf of the BIA given its previous forensic work for Prince Jefri.There were two main issues to be resolved in the view of the court.

The first was the nature of KPMG's retainer in relation to its forensic services.

In the court's view, a retainer in relation to forensic services should be viewed as subject 'to similar obligations as are imposed on solicitors'.That decision must be right.

There is precious little difference between an accountant acting in a forensic capacity in litigation from that of a solicitor engaged in the litigation.

His Lordship said: 'Nothing which I will say in this judgment is to be taken as having any impact whatsoever upon other work which accountants have to take and, in particular, work relating to audit.

However, in relation to the supply of forensic services; in relation to the performance of tasks which can be and often are undertaken by solicitors; and in relation to the giving and receiving of advice, in relation to the conduct of litigation or threatened litigation, I can find no rational basis for drawing any distinction between the duty owed by an accountant to his client and that owed by his solicitor or counsel.'The second important point was whether or not the steps taken by KPMG to create a 'Chinese wall' between the original investigation on behalf of Prince Jefri and its current investigation on behalf of the BIA was sufficient to safeguard the confidentiality owed to Prince Jefri.

In Mr Justice Pumfrey's view, there was sufficient risk to prevent KPMG from continuing to act.

He shared the scepticism of Ipp J in the Australian case of Mallesons v KPMG (1990) (4th Vol of Western Australian Reports) who had an ingrained scepticism 'as to the efficiency of Chinese walls'.The Court of Appeal by two to one reversed Mr Justice Pumfrey's decision, It took the view that, in this instance, there was adequate provision to safeguard the confidentiality of the information and that to do otherwise 'would be to set an unrealistic standard for the protection of confidential information which would create impediments in the way large international firms conduct their practice'.The reasoning behind the House of Lords decision has yet to be published but it is to be hoped that it will help to formulate clear guidelines if MDPs are to be permitted.MDPs may well be inevitable but that is no reason not to address the serious problems of conflict of interest and confidentiality that they will continue to pose.