Shah & Anor v HSBC Private Bank (UK) Ltd

On an application to redact employee identities from documents recording suspicious-activity reports, the court should determine: relevance; whether the material falls within a class prima facie protected by public interest immunity; and, if so, whether disclosure is justified by balancing the competing public interests.

Where a disclosed document is relevant but parts are redacted, the party making the redactions must justify them if challenged. Bank employees who report suspicions under the Proceeds of Crime Act fall within a class attracting prima facie public interest immunity. The protection must nevertheless be balanced against open justice and the claimant’s ability to test the alleged suspicion. In the circumstances, anonymised identification by department and letter was ordered, leaving further applications possible.

The claimants sought substantial damages arising from the bank’s delayed execution, or non-execution, of four payment instructions. The bank relied on suspicions that the transactions involved money laundering and had disclosed suspicious-activity reports to the Serious Organised Crime Agency.

Following summary judgment for the bank, the Court of Appeal dismissed the substantive arguments advanced by the claimants but held that the bank had to prove at trial that it genuinely held the relevant suspicion. The bank disclosed internal reports and reports to SOCA, but redacted the identities of all employees other than the money laundering reporting officer. The application concerned whether those identities were irrelevant or protected by public interest immunity and, if protected, whether the redactions should remain.

1. Disposition. The bank’s unilateral redaction of all employee identities except that of the money laundering reporting officer was unjustified. The redaction exercise was to be redone by assigning each employee a letter and identifying the employee’s department, without presently disclosing names.
2. Relevance. The remaining issue was whether the bank genuinely suspected the claimants of money laundering. A suspicion held in bad faith would not constitute a genuine suspicion. The identities of employees involved in originating, transmitting and assessing the suspicions were potentially relevant because they could bear on genuineness and on the bank’s case that suspicion existed at each of three reporting levels.
3. Under CPR 31.6, the disclosed reports and memoranda were plainly relevant. Although relevant documents may contain irrelevant passages capable of redaction, the party making the redaction must justify it when challenged. The redactor is ordinarily best placed to explain why the material fails the relevance test.
4. Public interest immunity. The court adopted the three-stage approach in Taylor v Anderton: determine relevance, decide whether the material falls within a class prima facie protected by immunity, and then balance the competing public interests. Bank employees reporting suspicions under the Proceeds of Crime Act were analogous to police informers and persons reporting child abuse. Their identities therefore fell within a protected class.
5. The public interest in confidentiality normally carried considerable weight because disclosure could inhibit reporting and expose employees to intimidation or harm. In this case, however, the claimants were not alleged to be money launderers, no reprisals from them were suggested, and the claimants already knew some identities. Those factors justified limited further disclosure while preserving anonymity for the time being. A schedule identifying each employee by department and letter would reveal the spread and repeated involvement of individuals and permit any focused later application for disclosure.

• Court of Appeal: The court dismissed the four substantive bases advanced by the claimants but held that the bank had to prove at trial that it genuinely held the relevant suspicion: [2010] EWCA Civ 31.
• High Court: On the subsequent disclosure application, the court ordered the bank to replace the undisclosed identities with departmental letter designations and permitted further focused applications if appropriate.