There is a recent court decision which will have a significant impact on people who get paid for outstanding invoices, before a company is wound up. It may mean that you, the supplier, get paid by your customer, but then you have to give all of the money...
One of the advantages of placing your trust in solicitors is that they owe a lifelong duty to maintain the confidentiality of any information you give them. That point was underlined by a High Court case in which a solicitor was banned from taking instructions that could conflict with the interests of her former clients.
The solicitor had, for about a year, worked as an in-house lawyer for a property company. During that period, she had access to confidential information concerning the company's assets and its financial and legal affairs. She had also been retained by the businessman who ran the company to advise him personally.
Surprisingly, she later accepted instructions from a family who were contemplating proceedings against the company and the businessman. Before doing so, she sought guidance from the Solicitors Regulation Authority and had required her prospective clients to sign a waiver, the terms of which had not been disclosed.
In granting an injunction that forbade her from acting for the family in the proposed proceedings, the Court noted that it is of the highest importance to the administration of justice that there must not be even an appearance of solicitors acting in a manner that might put current or former clients' confidential or privileged information into the hands of those with interests adverse to them.
There could be no doubt that she had come into possession of information that was confidential to the company and the businessman, neither of whom had consented to its disclosure. It was also possible that such information might be relevant to the current dispute. The solicitor had made conscientious attempts to ensure that there would be no conflict of interest, but they had not avoided, or even reduced, the risk that she might make subconscious use of confidential information.