Property Alliance Group Ltd v The Royal Bank of Scotland Plc

Confidentiality does not, by itself, prevent disclosure or inspection of a relevant document. Where inspection may expose a party to foreign criminal liability, the English court retains jurisdiction to order inspection but must exercise its discretion having regard to all the circumstances. The strong principle of open justice must be balanced against specific and compelling countervailing interests. General regulatory concerns carry less weight where the documents are highly relevant and concern matters of substantial public interest. Protective measures may include delaying inspection and restricting references to the documents in open court.

This was an application by The Royal Bank of Scotland Plc concerning five reports supplied by it to the Japanese Financial Services Agency. The reports were relevant to claims concerning alleged manipulation of LIBOR but had not been inspected by the court or the claimant, Property Alliance Group Ltd.

RBS relied on the JFSA’s objection to inspection, the risk of conflict with Japanese law, regulatory confidentiality, and the protection of cooperation between financial institutions and their regulator. The claimant sought unrestricted inspection. The central issue was whether inspection should be prohibited or restricted because of those foreign regulatory and public-interest considerations.

1. Inspection ordered. RBS was ordered to provide the five reports for inspection, with the order taking effect four weeks after 11 February 2015. Until further order, neither party could refer to the reports in open court without prior permission.
2. Confidentiality was no bar to disclosure or inspection. The court retained jurisdiction under English law to order inspection even where compliance might expose a party to foreign criminal proceedings. Whether to do so was a matter of discretion.
3. The reports were potentially highly relevant because they were inferred to concern LIBOR manipulation by RBS staff. The public interest in establishing the full extent of relevant LIBOR manipulation was obvious and compelling.
4. The JFSA’s concerns about systemic stability, legitimate interests and future regulatory cooperation were sincere but expressed in general and unspecific terms. They did not explain why inspection of these reports, in the circumstances, would cause the asserted harm.
5. The likelihood of RBS being sanctioned under the Japanese legislation was very remote. The reports contained RBS’s own information, and there was no suggestion that they contained confidential information belonging to the JFSA. It was also unclear that the Japanese statute purported to prevent RBS from disclosing its own information to comply with an English court order.
6. The restrictions under CPR r31.22(1), together with the requirement for advance permission before open-court reference, provided safeguards. Once the contents had been seen, the continuing restriction might appropriately be reconsidered.

The judgment and transcript were directed to cease being private on 11 March 2015, with permission to apply in the meantime.