In the case of Property Alliance Group Limited v Royal Bank of Scotland Plc, the High Court was asked to inspect certain documents created in the context of a regulatory investigation, to confirm whether they could properly be said to be protected by legal advice privilege. In upholding RBS' claim for privilege, the Court has provided helpful guidance as to the scope of legal advice privilege in the context of complex, multi-jurisdictional regulatory investigations.


We reported on an earlier decision in the proceedings between Property Alliance Group ("PAG") and RBS in our July Newsletter. Full details of the facts and the background to the current disclosure dispute can be found in that article. Briefly, PAG alleges that RBS induced it to enter into four interest rate swap agreements between 2004 and 2008 that used GBP LIBOR as a reference rate. PAG claims that in proposing those swaps, RBS implicitly misrepresented that it was not rigging the relevant LIBOR rate. As has been well publicised, RBS has been involved in regulatory investigations in respect of LIBOR manipulation in a number of jurisdictions. It has admitted being involved in rigging Japanese Yen and Swiss Franc LIBOR rates, and has paid fines of about £700 million in respect of those matters. It has not admitted manipulating GBP LIBOR rates

As we reported in July, the Court had previously been asked to address the issue of whether certain documents created by RBS during the course of its internal investigation into the LIBOR scandal could properly be said to be privileged. Some of the documents in question were created for an RBS committee known as the Executive Steering Group ("ESG"), which had been put in place to oversee the LIBOR investigations and related litigation. The ESG was made up of individuals from within RBS' legal, HR and compliance functions, as well as senior management. The documents themselves were briefings and minutes of ESG meetings which had been created by RBS' external lawyers, Clifford Chance. RBS claimed that they were protected by legal advice privilege.

In July, the Court ordered that the ESG documents should be inspected by a High Court judge, who would confirm whether they were in fact privileged. That inspection has now taken place.


Mr Justice Snowden has confirmed that the ESG documents are all protected by legal advice privilege. In doing so he has provided some useful and practical guidance in relation to the policy reasons governing the principle of legal advice privilege and the scope of that privilege, particularly in the context of regulatory investigations.

Mr Justice Snowden noted that all of the ESG documents were drafted by Clifford Chance, who had been engaged to provide advice and assistance relating to RBS' legal rights, liabilities and obligations. Although not all of the documents actually contained legal advice, they were all part of a "continuum of communication and meetings" between Clifford Chance and RBS, the object of which was the provision of legal advice. Clifford Chance had not only produced minutes of meetings, but, importantly, had also given their impressions on matters discussed at those meetings, responded to questions as to RBS' position and advised RBS on what it should do next.

PAG had suggested that if Mr Justice Snowden found that parts of the documents contained legal advice, those parts should be redacted and the rest of the documents provided to PAG for inspection. Mr Justice Snowden disagreed. He held that the entire documents were part of the necessary exchange of information, the object of which was to give and receive legal advice. He noted that there might be circumstances where a lawyer receives correspondence from its client which is entirely unrelated to the giving or receiving of legal advice (such as a notification of the sale of a property or a request that the solicitor collects rent from tenants for example), but the ESG documents were very far removed from this type of situation.


Mr Justice Snowden's approach in this case will be of comfort to entities involved in complex multi-faceted regulatory investigations where these investigations have gone on for a number of years and a large amount of communications will have been created in dealing with the investigations and remediation. It highlights the fact that lawyers must be able to communicate freely with their clients to enable the client to make fully informed decisions. It also demonstrates an appreciation of the fact that clients require their lawyers to fulfil multiple roles, including not only the giving of legal advice but also the provision of candid factual briefings and updates. The decision is a blow to Claimant lawyers as it means that a large amount of potentially important information will not be aired in the proceedings. However, it seems to us that the decision by the Court was the correct one. The regulatory investigations with LIBOR manipulation were lengthy and complex and the financial institution had to involve internal and external legal advisors at almost every step of the way. To have to think that communications involving these legal advisers would potentially be disclosable to third parties at some undefined later stage would be wholly against the principles that legal privilege is intended to cover. Cynics may say that simply involving a lawyer is a way to protect otherwise disclosable communications but that is too simplistic a view as the law on legal privilege is well developed and has considered instances where circumstances and communications are truly not in the nature of the provision of legal advice. This latest decision reinforces the position that communications involving lawyers and the provision of legal advice will continue to be protected by legal privilege.