Recent case provides useful analysis on the principles of legal advice privilege

Published: 1/12/2015

The recent case of Property Alliance Group Limited ('PAGL') and The Royal Bank of Scotland ('RBS') [2015] EWHC 3187 (Ch) provides useful analysis of the principles of legal advice privilege.

The case concerns claims by PAGL that RBS induced it to enter into various interest rate swap agreements over a four year period that were pegged to 3 month GBP LIBOR as a reference rate. PAGL alleges that RBS implicitly misrepresented that it was not rigging that LIBOR rate. Subsequently, RBS admitted it was involved in rigging various LIBOR rates but not GBP LIBOR rates.

Following a disputed disclosure order in an earlier stage of the litigation, an inspecting Judge was appointed to consider whether a claim to legal advice privilege had been correctly made out by RBS to resist inspection of various “high level” internal reports, reviews and summaries concerning allegations of LIBOR misconduct known as the “ESG High Level Documents.” These were provided to RBS’ Executive Steering Group, known as the “ESG,” a standalone committee established to oversee regulatory investigations and related litigation at the bank.

The ESG High Level Documents consisted of two categories of confidential documents prepared by external lawyers on a regular basis which were:

  • tabular memoranda which informed and updated the ESG on the progress, status and issues arising in regulatory investigations, including matters in the public domain, and which formed the basis of strategy discussions and legal advice given; and
  • summary minutes concerning the discussions between the ESG and its lawyers at the ESG meeting, reflecting the lawyers’ views on the regulatory investigations.

PAGL submitted, in summary, that the ESG High Level Documents were unlikely to attract privilege in their entirety because the ESG had a wider remit than simply receiving legal advice as supervisors or managers of part of RBS’ business and that in essence, the lawyers in attendance were acting as a secretariat to its meetings.

However, in judgment, Mr Justice Snowden held that the ESG High Level Documents did attract legal advice privilege. The judgment helpfully outlines the principles of a claim for legal advice privilege starting with the basic formulation in Three Rivers (No. 6) that “legal advice privilege attaches to all communications made in confidence between solicitors and their clients for the purpose of giving or obtaining legal advice even at a stage when litigation is not in contemplation…” One of the key issues the Judge considered was whether there was a “relevant legal context”, given the nature of the documents described above, that related to the “rights, liabilities obligations or remedies of the client[RBS]...” 

He held that such a context existed and affirmed the broad approach set out by Taylor LJ in Balabel v Air India as to whether a communication or document was made confidentially for the purpose of legal advice. In applying that approach, he held that the ESG High Level Documents formed part of a “continuum of communication and meetings” between RBS and its lawyers, the object of which was to give legal advice.

This judgment is unsurprising and, from a policy perspective, reflects the need for legal advice privilege to retain its current scope so that there can be a candid flow of information between lawyer and client without fear of or the absence of consent to the disclosure of communications or documents to third parties.


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