On 12 December 2016 the High Court awarded property development firm, Harlequin, damages in the sum of US$11.6m against top tier accountancy firm, Wilkins Kennedy.

Harlequin Property (SVG) Ltd and another v Wilkins Kennedy (a firm) [2016] 3188 EWHC (TCC)


During the final chapter of this High Court battle, and in a judgment that runs to 897 paragraphs, Judge Mr Justice Coulson considered the extent to which professionals may act where there is a conflict of interests and more specifically, whether there is a duty on professionals to disclose to one client, confidential information relating to another.

Wilkins Kennedy provided Harlequin with financial and business advice in respect of the development and construction of the Buccament Bay Resort in St Vincent and the Grenadines. However, unbeknown to Harlequin, the accountancy firm also agreed to take instructions from the building company, ICE Group, which was carrying out the construction work on the Buccament Bay Resort.

To complicate matters further, Harlequin and ICE were in a bitter dispute over the costs associated with the construction work at the time that Wilkins Kennedy were subsequently engaged by ICE.


Justice Coulson said at paragraph 184 of his judgement that senior representatives of Wilkins Kennedy did not have “the first clue as to any rule relating to client confidentiality”.

The Judge acknowledged that, as a matter of general principle, a firm of accountants can act for two parties in situations where there may be a conflict of interests, however, he was of the opinion that under the particular circumstances, it was unacceptable for Wilkins Kennedy to accept instructions to act for both the developer and the contractor and that Wilkins Kennedy should have declined ICE’s request for assistance.

Wilkins Kennedy claimed that they were able to act for both Harlequin and ICE because both parties’ instructions were being dealt with by different employees in separate offices, meaning that there was a sufficient “information barrier” in place to prevent either party from being adversely affected by its decision to act for both parties. However, it was clear from the evidence that the information barrier was ineffective. There was a clear overlap between Wilkins Kennedy’s offices, whereby certain employees were advising both parties at the same time in connection with the Buccament Bay Resort. Furthermore, representatives of Wilkins Kennedy were unable to identify any protocol that was in place to prevent employees who were acting for one party, from obtaining information which was confidential to the other party.

Justice Coulson stated that even in circumstances where it would have been acceptable for Wilkins Kennedy to act for both parties, as a bare minimum, it should have obtained written “informed consent” from Mr Ames (the owner of Harlequin), to accept instructions to act for ICE whilst already acting for Harlequin. However, it is apparent that informed consent from Mr Ames was never properly sought, let alone given.

In addition to the blatant conflict of interest was a claim that Wilkins Kennedy, as Harlequin’s business advisors, should have disclosed to Harlequin information that was confidential to ICE. In particular, the accountancy firm was in possession of information which it was alleged demonstrated that the owner of ICE, Mr O’Halloran, was misappropriating funds from Harlequin’s investors in order to help fund his lavish lifestyle. Wilkins Kennedy, on the other hand, maintained that it owed no such obligation to Harlequin.

Judge Coulson sided with Wilkins Kennedy on this point of law and determined that there was no authority for the suggestion that an accountant who finds himself with a conflict of interests, owes a duty to disclose to client A (who engaged him first) information confidential to client B (who engaged him subsequently). It was Judge Coulson’s view that such a principle would offend against common sense.

In his judgement, Justice Coulson referred specifically to the case of Bolikiah v KPMG [1999] 2 WLR 215which affirmed that the position of auditors and accountants in relation to client confidentiality and disclosure of confidential information is very different to that of solicitors as they act in a different professional, regulatory and ethical context. Justice Coulson also made reference to the case of Kelly v Cooper [1993] AC 205, which is authority for the proposition that a professional owes no duty to relay confidential information relating to one client to another, so there could be no liability for failure to do so. The position is very different where the professional instructed is a solicitor, where irreconcilable conflicting duties would be likely at the outset to oblige solicitors to decline to act for the second client, or where the conflict arose at a later stage, to discontinue acting in the matter for either client.


Justice Coulson concluded that under the circumstances, Wilkins Kennedy should have immediately resigned its retainer with ICE upon becoming aware that Mr O’Halloran was misappropriating funds from Harlequin. Wilkins Kennedy could have informed Mr Ames that it had ended its retainer with ICE, without disclosing the reasons why.

Out of the numerous allegations made against Wilkins Kennedy, only one claim was upheld by the Court. The successful claim related to Wilkins Kennedy’s failure to advise Harlequin about the fundamental requirement of a valuation process, which lead to ICE being substantially overpaid by Harlequin. A straightforward valuation process would have ensured that ICE was only paid a reasonable amount for the work that it performed. Accordingly, Wilkins Kennedy was ordered to pay Harlequin damages in the sum of $11.6m (paragraph 894). If it had not been for Harlequin’s contributory negligence, the award would have been doubled to $23.2m.

The outcome of this case affirms that accountants are not under any duty to disclose to one client, information that is confidential to another client. However, it does highlight the importance of managing conflicts of interest cautiously and ensuring that sufficient protocols and information barriers are in place where necessary. Accountants should also consider whether informed consent may be required from one client prior to accepting instructions from another. As in this case, there may be instances where it is necessary for an accountant to resign his retainer and stop acting for a client altogether.

If you would like to speak to anyone about any of the issues raised in this article please contact, the head of our Dispute Resolution department, Jonathan Warner Reed.

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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