Real Estate Opportunities Ltd v Aberdeen Asset Managers Jersey Ltd & Ors

Under the Financial Services and Markets Act 2000, the prohibition on disclosure in section 348 attaches to confidential information obtained from the regulator, not to documents merely because they contain such information. A recipient does not obtain information from the regulator if it already possessed or knew it, including knowledge attributed to a company under ordinary attribution rules. An indirect recipient is not bound where the intermediary was free to disclose. Subject to redaction of protected material, the court may order inspection under CPR 31. Inspection of warning notices in accordance with court rules is not publication under section 391, although use in open court may require protective measures.

Real Estate Opportunities Ltd sued UBS Ltd and Aberdeen for alleged tortious and contractual breaches arising from its flotation and subsequent management. The defendants disclosed documents but withheld FSA interview transcripts, FSA communications and warning notices, relying on sections 348 and 391 of the Financial Services and Markets Act 2000. David Richards J ordered inspection, subject to safeguards including redaction: [2006] EWHC 3249 (Ch). The defendants appealed, challenging the construction of obtain, attribution of employees’ knowledge to corporate defendants, the proportionality of inspection, and whether inspection would publish warning notices. The Court of Appeal considered those four questions.

Lady Justice Arden gave the leading judgment. Lord Justice Lawrence Collins and Lord Justice Tuckey agreed. Both appeals were dismissed.

1. Meaning of obtaining information. Section 348 concerns confidential information obtained directly or indirectly from the FSA, rather than documents as such. A person does not obtain information from the FSA if it already possessed or knew that information before the FSA supplied it, even if the person was not the source of the FSA’s information. Repeated receipt from the FSA does not remove the restriction where the FSA is the only source, but an independent source does. This approach was consistent with Arbuthnott v Fagan [1996] 1 LRLR 143 and the reasoning discussed in Re Galileo Group Ltd [1999] Ch 100.
2. Corporate attribution. Whether a company already knew information is determined under the ordinary rules of attribution. Knowledge acquired by employees, agents, consultants or directors in the course of their duties may be attributed to the company. Section 348 does not require knowledge by the company’s directing mind and will, and no special rule of attribution was justified. The possibility of forgotten information was left open in provisional terms. A misdescription originating with an employee is different from mistaken information already held by the company; accuracy is not otherwise a prerequisite to information being pre-existing.
3. Inspection and redaction. Under CPR 31.12(3), the court may order specific inspection where refusal would be disproportionate under CPR 31.3(2). Protected information may be redacted. The burden of redaction, risks of criminal liability, possible misleading effect and trial-management difficulties were relevant considerations, but they did not justify refusing inspection. The judge was entitled to leave problems arising at trial to the trial judge. The broader discretion under section 236 of the Insolvency Act 1986 was materially different. Confidentiality or compulsion of the interviews did not provide a sufficient reason to refuse inspection, applying Wallace Smith Trust Co v Deloitte Haskins and Sells [1997] 1 WLR 257.
4. Warning notices. In the context of section 391, publication entails dissemination with a view to making information available to the public. Inspection between parties under court rules is not publication merely because the documents are made available for the litigation. Deployment in open court may amount to publication, in which case reporting restrictions or a private hearing may be appropriate.

1. Court of Appeal (Civil Division). In [2007] EWCA Civ 197, both appeals were dismissed and the order for inspection was upheld.
2. High Court of Justice, Chancery Division. David Richards J ordered inspection of the documents on 15 December 2006, subject to protections including redaction: [2006] EWHC 3249 (Ch).