There are many potential use cases for information barriers. For example, a financial company may use an information barrier to prevent insider trading between departments and individuals who have access to personal information that affects the valuation of the company and employees on the trading floor. “Information barriers” refer to the separation between different departments or people within an organization. An information barrier is essentially intended to block the exchange of confidential information and to prevent conflicts of interest. Its goal is to help law firms protect themselves against the risk of breach of confidentiality vis-à-vis former clients. By providing guidance on the factors typically considered in establishing an effective barrier, these guidelines can help reduce the effectiveness of information barriers in court and elsewhere. To ensure that this sensitive information doesn`t accidentally leak, companies can limit collaboration and communication between internal teams to prevent users from searching for each other or sending emails, chatting or calling each other, and accessing files through sharing links. The guidelines are aimed at law firms that must quarantine information to avoid a breach of confidentiality in cases where the law firm wishes to intervene in a case where it has information relevant to the case but confidential to a former client. The guidelines are intended to help law firms take steps to prevent a breach of confidentiality owed to the former client. Without an effective barrier to information, the law firm would generally not be able to act due to conflict of interest. There is a conflict between the duty of confidentiality owed to the former client and the obligation owed to the current client to disclose and/or use all information in the firm`s possession for the benefit of the current client`s case. The law firm may act when it can demonstrate that there is no unacceptable risk of breach of confidentiality.
This may be possible by following the guidelines. The burden of proof that there is no unacceptable risk lies with legal practice. An effective impediment must prevent not only the intentional disclosure of confidential information, but also accidental or accidental dissemination and, as stated in Asia Pacific Telecommunications Ltd v. Optus Networks Pty Ltd1, even accidental involvement by a “verified person” in a case. In addition, breaking through information barriers can have a number of other implications for businesses: Some of the ways companies can implement information barriers include: physically separating departments, monitoring conversations between employees and customers, splitting systems of record, and establishing access controls. An information barrier, properly established taking into account the aspects set out in these guidelines, is an important element in maintaining confidentiality and allows a law firm to take action against a former client without failing in its obligation to maintain that client`s trust. It can also be an effective rebuttal of the presumption of imputed knowledge. Information barriers are essentially two-way access restrictions that define which groups of users can communicate with each other. Intelligent DLP email solutions such as Egress Prevent can scan emails to determine whether the message content contains sensitive or identifiable data.
It then polls both the recipient and their domain to identify potential violations or conflicts of interest and determine whether they need access to this type of information. When a risk is identified, the risk is explained by a clear prompt so that the user can avoid a potentially costly security risk. These guidelines are intended to provide a fair and objective basis for assessing the appropriateness of a law firm`s actions. It is important to note that the effectiveness of an information barrier depends on the facts of each case. For some organizations, especially in the financial and legal sectors, even obtaining information without sufficient legal barriers can lead to non-compliance. The first of these measures concerns established protocols. It is unlikely that an ad hoc obstacle to address a particular problem, rather than one based on established institutional arrangements, would be considered effective by the courts. The procedures and practices that underpin information barriers must be part of the law firm`s culture and organizational structure. Information barriers are designed to protect investors, customers, and other key stakeholders by preventing the leakage of confidential information that could lead to ethical or legal violations. The guidelines state that they should not apply to “concurrent fees” when a law firm simultaneously serves two or more clients with conflicting interests, as different considerations apply.
A barrier in itself is not a solution to a situation where there is a conflict between current customers. It does not release the obligation of undivided loyalty due to each current customer. However, in such situations, a law firm may be able to act with the fully informed consent of each client. Consent may be obtained on the basis that confidentiality must be maintained by means of an effective barrier to information. Otherwise, there should be exceptions to confidentiality, but these may not be appropriate or imminent. However, the use of the “Great Wall of China” is being phased out as part of a broader effort to promote diversity in the financial services sector. Today, they are most often referred to as “information barriers,” although sometimes you`ll still call them “ethical walls,” with the terms used interchangeably. In fact, the UK`s Financial Conduct Authority (FCA) ended the use of the “Great Wall of China” in its communications in 2021. In summary, guidelines are established and documented protocols for maintaining information barriers.
While recognizing that they are intended for all law firms, the guidelines indicate in the “common questions” that it can be extremely difficult for small firms to demonstrate compliance with the guidelines in fact, particularly to maintain requirements for the physical separation of staff and files. In fact, it has been said that it will be “almost impossible” for a small business to erect an effective information barrier.2 Almost all reported cases involved large companies. Many organizations are trying to work around this problem by enforcing information barriers in email using Microsoft 365`s rules-based static data loss prevention (DLP) and secure email gateways (SEGs). However, this is not scalable to meet the needs of modern businesses. Instead, companies should aim to achieve this goal through intelligent email DLP. In the past, information barriers were also called “Chinese walls”. The term was coined in the 1930s after the stock market crash of 1929 led the U.S. government to impose separation of information between investment bankers and brokerage firms. The objective was to limit the conflict of interest between the objective analysis of the company and the desire for success of IPOs. An information barrier alone is not a solution to a situation where there is a conflict of interest between a client and another client of the company.