Property Alliance Group Limited v The Royal Bank of Scotland Plc (5 November 2015)

The High Court has ruled that legal advice privilege is not restricted to actual legal advice but can extend to factual information exchanged between lawyer and client in the course of giving advice.

Facts

In this ongoing case Property Alliance Group Limited (PAG) contends that the Royal Bank of Scotland Plc (RBS) mis-sold swap contracts to PAG in the period 2004 to 2008. RBS asserted privilege in various categories of documents prepared by its external lawyers relating to meetings of the bank’s Executive Steering Group (ESG), which was a special committee formed by the bank to oversee the regulatory investigations in relation to LIBOR misconduct and related litigation and to liaise with the bank’s lawyers.

The court was required to determine whether RBS had properly claimed legal advice privilege over documents otherwise subject to disclosure in ongoing litigation. Snowden J was appointed as the inspecting judge. The documents fell into either of two categories.

  • Confidential memoranda in the form of tables, which informed and updated the ESG   on the progress, status and issues arising in the regulatory investigations. Many of the relevant entries in the body of documents were no more than a brief factual recital of a recent event that had occurred or which was scheduled that would not, by their nature, have attracted privilege.
  • Confidential notes/summaries concerning the discussions between the ESG and its legal advisors at the ESG meetings. These notes reflected the external lawyers’ views on the regulatory investigations, as the firm ultimately determined the information to be included in the notes.

Outcome

Snowden J upheld RBS’s claim to legal advice privilege in respect of both categories of documents.  He noted that the areas of debate as to the proper extent of legal advice privilege have arisen from two sources: firstly, over the years, solicitors have tended to offer their clients a range of what might loosely be described as “business” services; and secondly, that not all communications between a solicitor and his client will necessarily be for the purposes of giving or obtaining legal advice.

The court was entirely satisfied that the external lawyers were engaged by RBS in a   “relevant legal context” and that both categories of document formed part of “a continuum of  communication and meetings” between lawyer and client, the object of which was the giving of legal advice as and when appropriate.

The judge considered that the first category of documents constituted “information … passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required” as they were entirely focused on providing the information concerning the regulatory investigations which the ESG needed to know.

As for the second type of document, the summary minutes showed that the lawyers from different jurisdictions supplemented the contents of the tables with reports and references to meetings and communications that they had with regulators on behalf of RBS. Importantly, the lawyers gave their impressions of those matters, responded to questions as to RBS’ position and gave their suggestions as to what the bank should do next in the context of the investigations.

Snowden J did also comment, however, that he could well see that, depending on the facts, a court might not uphold a claim to privilege in respect of the minutes of a business meeting simply because the minutes were taken by a lawyer, or to press cuttings provided from its own library to a client for a board meeting where the client’s own public relations department could not find them. This would be because the lawyer was not “being asked qua lawyer to provide legal advice”.

For completeness, Snowden J considered whether the communications within the ESG documents fell within the policy underlying the justification for legal advice privilege. He concluded that they did; there is a clear public interest in regulatory investigations being conducted efficiently and in accordance with the law. That public interest will be advanced if  the regulators can deal with experienced lawyers who can accurately advise their clients how to respond and co-operate. Such lawyers must be able to give their client candid factual briefings as well as legal advice, secure in the knowledge that any such communications and any record of their discussions and the decisions taken will not subsequently be disclosed without the client’s consent.

Points to note

This decision confirms that legal advice is not restricted to actual legal advice, but also includes factual information communicated between lawyer and client in the course of giving legal advice.

The decision is helpful for businesses faced with regulatory investigations, where legal advice and decision making may be based on the information provided by investigations and other third parties. Ultimately, however, the question of privilege will always be fact-dependant. The case therefore serves as a reminder that businesses will need to be alive to the issue of privilege in setting up their lines of communication from the start.