Property Alliance Group Ltd v The Royal Bank of Scotland Plc

Privilege claims must be supported by sufficiently specific evidence. An affidavit is generally conclusive unless the court is reasonably certain that the claim is mistaken or incomplete.

Settlement communications between a regulated firm and the FCA may attract protection analogous to without prejudice privilege. That protection is lost in civil proceedings where the firm puts in issue the basis on which the regulatory decision was reached. Limited disclosure to regulators does not ordinarily waive privilege where confidentiality and privilege are expressly preserved.

Disclosure must satisfy the overriding objective and proportionality. Where targeted review of regulatory documents is likely to reveal the material issues, a further review of an entire document population is unnecessary.

The claimant, a property developer, entered into interest rate swaps with the defendant bank by reference to GBP LIBOR. It alleged LIBOR-related misrepresentations and implied contractual terms. The judgment followed earlier case-management decisions concerning the scope of disclosure.

The claimant challenged the bank’s claims to legal advice privilege, litigation privilege and without prejudice protection over documents concerning regulatory investigations into LIBOR. It also challenged privilege over documents shown or provided to regulators. The court further had to determine the proportionate scope of disclosure concerning LIBOR currencies and tenors other than GBP.

1. Privilege evidence. The principles in West London Pipeline v Total [2008] EWHC 1729 (Comm) applied. The burden lay on the party claiming privilege. The court was not satisfied that the bank had established legal advice privilege over the high-level ESG documents because the evidence did not adequately explain whether the committee’s function was solely to obtain legal advice or also to receive factual reports. The documents were therefore ordered to be produced to the court under CPR r31.19(6).
2. Litigation privilege. The application directed to the litigation-privilege claims was dismissed. Even if the bank’s overlapping claims were imperfectly formulated, that did not establish a wider defective approach or itself justify inspection.
3. Regulatory settlement communications. Settlement discussions with the FCA may attract a form of protection analogous to the without prejudice rule. The regulatory process can lead to adversarial proceedings before the Upper Tribunal, and the public policy of facilitating frank settlement discussions is capable of applying. The protection is not identical to the ordinary civil rule.
4. Loss of protection. The protection could not be maintained here because the bank positively relied on the absence of a GBP LIBOR finding in the Final Notice while withholding the communications on which that Notice was based. Justice required inspection of those communications. The same reasoning required inspection of six documents shown or provided to regulators, despite limited-waiver agreements.
5. Further disclosure. Applying proportionality and the overriding objective, disclosure for non-GBP LIBOR was directed to the Regulatory Review Documents. A review of the bank’s entire population of approximately 25 million documents was not justified by the likely return.

First-instance decision following earlier case-management judgments in the same proceedings, including [2014] EWHC 4308, [2015] EWHC 321 and [2015] EWHC 322.