Claim of Legal Advice privilege by RBS in its LIBOR litigation upheld: Property Alliance Group Limited v Royal Bank of Scotland PLC

23 November 2015

Louise Lanzkron, Jeremy Sharman

Bird & Bird & First for Disputes

The latest edition of Bird & Bird's DR Essentials briefing on the 'Limitations of the Without Prejudice Rule' considered the ruling in Property Alliance Group Limited v Royal Bank of Scotland PLC [2015] EWHC 1557 (Ch) which held that a form of without prejudice privilege could apply to settlement discussions with a regulator. This aspect of the ruling is still subject to an appeal. However, the High Court recently considered RBS's claim to legal advice privilege regarding other documents in the litigation.

RBS claimed legal advice privilege in various high level internal reports, reviews and summaries relating to allegations of LIBOR misconduct in its long-running litigation with Property Alliance (PA). The documents were created to help with the conduct of RBS's response to various regulatory investigations it was involved in and were drafted by RBS's legal advisers. The documents were sent to an Executive Steering Group (ESG) formed by RBS to discuss the status of these investigations. The ESG included representatives from RBS as well as RBS's legal advisers. PA sought disclosure of these documents claiming that legal advice privilege could not attach to all these documents in their entirety.

The documents consisted of two primary types:

  • tables that updated and informed the ESG on the progress, status and current issues in the regulatory investigations, and
  • notes and summaries reflecting the legal adviser's views on the investigations.

There was no dispute as to the requirements for a claim to legal advice privilege between the parties and the court followed the well-known tests set out in Three Rivers District Council v Bank of England (no.6) [2004 UKHL 48 and Balabel v Air India [1988] 1 Ch 317.

The court agreed with RBS that both types of documents represented the continuum of communication as they were aimed at keeping the lawyers and RBS informed so that "advice may be sought and given as required". The lawyers were retained "to provide advice and assistance and this included the rights, liabilities and obligations of RBS and the remedies that might be granted against it either under private law or under public law". Snowden J held that the type (i) documents were created to provide up to date and comprehensive summaries of legal advice sought and required, whilst the purpose of the type (ii) documents was to enable the lawyers to make suggestions regarding what RBS should do next. The court was satisfied that this was advice in a 'relevant legal context' and should be protected from disclosure.

Snowden J held that there was a clear public interest in communications between a lawyer and a client having protection in the context of a regulatory investigation, and that lawyers must be able to give their clients candid factual advice secure in the knowledge that it will not be disclosed without the client's consent. The judgment does consider some situations where legal advice privilege may not apply, for example, in the context of lawyers simply taking minutes of a business meeting where no confidential legal advice was given. But the court held this was not the situation on the facts. Whilst this decision makes no fundamental change to the law of privilege it serves as a reminder that where advice is given regarding the actions a client should take in the context of a regulatory investigation, legal advice privilege can apply to protect a client's confidential discussions with their lawyers.

Authors

Louise Lanzkron

DR Knowledge & Development Lawyer
UK

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