LIBOR documents drawn up by Clifford Chance are protected by legal advice privilege, High Court rules

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11 November 2015


Snowden J: lawyers must be able to give “candid factual briefings” to clients

Documents drawn up by Clifford Chance for a special RBS committee dealing with the LIBOR scandal are protected by legal advice privilege, the High Court has decided, saying that lawyers must have able to give clients “candid factual briefings” as well as legal advice.

Mr Justice Snowden said: “There is a clear public interest in regulatory investigations being conducted efficiently and in accordance with law.

“That public interest will be advanced if the regulators can deal with experienced lawyers who can accurately advise their clients how to respond and co-operate.

“Such lawyers must be able to give their client candid factual briefings as well as legal advice, secure in the knowledge that any such communications and any record of their discussions and the decisions taken will not subsequently be disclosed without the client’s consent.”

Snowden J said that the Property Alliance Group (PAG) alleged that RBS induced it to enter four interest rate swap agreements between 2004 and 2008, and in doing so “implicitly misrepresented that it was not rigging the relevant LIBOR rate”.

The relevant rate was sterling, and although RBS has admitted it was involved in rigging the Swiss Franc and Japanese Yen LIBOR rates, the judge said it had not admitted misconduct in setting the British rates.

At a previous hearing in June, Mr Justice Birss directed that a set of documents at issue in disclosure proceedings – called the executive steering group (ESG) “high level documents” – should be inspected by another Chancery Division judge to determine whether the bank’s claim of legal advice privilege should be upheld.

Ruling in Property Alliance Group v The Royal Bank of Scotland [2015] EWHC 3187 (Ch), Snowden J said: “I can well see that, depending on the facts, a court might not uphold a claim to privilege in respect of the minutes of a business meeting simply because the minutes were taken by a lawyer who was present and subsequently sent them to his client.”

However in this case, the judge said Clifford Chance did not attend the meetings “simply, or even primarily, to provide administrative support”. Instead the meetings had “a very substantial legal content” and it was “no surprise” that lawyers led the discussions.

“They were doing so because they were handling the many regulatory investigations and claims in different jurisdictions on behalf of RBS, and the ESG meetings were being held so that the lawyers concerned could give information and legal advice to the members of the ESG as to what to do about those investigations and claims.

“In that legal context it was entirely understandable that Clifford Chance should take the lead in deciding how to present the relevant information to the ESG members, in setting the agendas and co-ordinating the meetings, in leading the discussions and in preparing the minutes.

“They were not providing those services as a simple matter of administrative convenience: they were doing so as an integral part of their provision of legal advice and assistance to the ESG.”

Snowden J went on: “Lawyers are often also given the task of investigating, or are in possession of, relevant information. The lawyer must be able freely to communicate that information to his client to enable the client to make a fully informed decision as to what further legal advice to obtain, and what to do.

“When legal advice is then given, the lawyer must also be able to provide the client with an accurate record of the discussions and the decisions taken as a consequence.

“If the lawyer was concerned that his communications might be disclosable to third parties without the client’s consent, he would be most unlikely to commit such matters to paper, with the inevitable risk of misunderstandings as to the facts, the legal advice given, and the decisions taken.

“That could not possibly be said to serve the public interest in assisting clients to achieve an orderly arrangement of their affairs.”

The judge upheld RBS’s claim to legal advice privilege in respect of all the ESG documents he had inspected.

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