Property Alliance Group Ltd v The Royal Bank of Scotland Plc

The issue that I have to decide is whether documents which have been referred to in earlier Judgments and Orders as “the ESG High Level Documents” are documents for which legal advice privilege has been properly claimed by the Defendant (“RBS”). The ESG High Level Documents were disclosed in Category 1 of Appendix B to a supplemental list of documents dated 20 February 2015.

By paragraphs 1-3 of an order made on 15 June 2015, following a judgment handed down on 8 June 2015 ([2015] EWHC 1557 (Ch)), Birss J directed that the ESG High Level Documents be produced to the court for inspection pursuant to CPR 31.19(6); that they be inspected by another Judge of the Chancery Division; and that the inspecting Judge should determine (i) whether the claim for privilege is well-founded or not, and (ii) if parts of the documents are privileged, whether any suitably redacted copies should be provided for inspection (so as to withhold only the privileged parts).

The nature of the litigation and the background to the order for inspection were set out in paragraphs 1-40 of the judgment of Birss J to which I have referred. In brief, the Claimant (“PAG”) alleges that RBS induced it to enter into four interest rate swap agreements between 2004 and 2008 that employed 3 month GBP LIBOR as a reference rate. PAG claims that by proposing such swaps, RBS implicitly misrepresented that it was not rigging the relevant LIBOR rate. As is well-known, following regulatory investigations in various jurisdictions, RBS has admitted that it was involved in rigging the Japanese Yen and Swiss Franc LIBOR rates and as a result has paid substantial fines of about £700 million. It has, however, denied misconduct in relation to the setting of any GBP LIBOR rates.

At an earlier stage in the litigation, Birss J ordered disclosure relating to all LIBOR currencies and tenors rather than just 3 month GBP LIBOR. The practical problem produced by that order was the sheer volume of documents that would need to be reviewed (about 25 million). It was thought that one way forward, in order to focus and limit the disclosure exercise, would be for RBS to disclose “high level” internal reports, reviews and summaries relating to the allegations of LIBOR misconduct. PAG suggested that there must be documents of this type in existence, not least because the RBS board or some sub-committee must have received such high level documents in order to perform its function, and that not all such documents could be privileged.

Attention was thus focussed on the Executive Steering Group (“ESG”) of RBS. In paragraphs 27-40 of his judgment, Birss J described how the precise origins and role of that body had been the subject of a great deal of attention in evidence and submissions. Based on that material, and on the basis of his understanding as to the role of the ESG, Birss J was not satisfied that the claim to legal advice privilege had been correctly made out, and hence he made the order for inspection by the court.

I was subsequently appointed as the inspecting Judge and RBS duly produced 81 ESG High Level Documents for my inspection. Given the uncertainties as to the role of the ESG which had been highlighted by Birss J, I made an order that RBS should provide me with a witness statement setting out the background facts and exhibiting any documents that it contended were relevant to the claim to privilege, and that PAG should have the opportunity to respond to that evidence. In addition, and in marked distinction to the difficulties which confronted Birss J, I was also able to review the documents themselves before hearing argument on 24 September 2015 on the applicable legal principles that I should apply.

The ESG and its role were described in the witness statement of Mr. Paul de Gruchy dated 31 July 2015. Mr. de Gruchy is the Senior Legal Counsel in the Corporate and Institutional Banking division of RBS and was an attendee at meetings of the ESG.

Mr. de Gruchy’s evidence explained that after the commencement of the many regulatory investigations in various jurisdictions including the United States, the United Kingdom, Canada and Japan in April 2010 (the “Regulatory Investigations”), RBS instructed a number of external legal advisers in different jurisdictions to advise the bank and to represent it before the numerous regulators. Principal among these law firms were Clifford Chance, which had primary responsibility for regulatory matters and defending litigation brought by customers and third parties, and SJ Berwin LLP which had responsibility for competition law issues.

Mr. de Gruchy’s evidence continued,

“13.

To oversee the Regulatory Investigations and related litigation, and liaise with the Bank’s legal advisors and provide instructions accordingly, the Bank established an Executive Steering Group or ESG. The ESG was set up as a standalone committee rather than as a sub-committee of the Bank’s Board of Directors….

14.

The ESG was comprised of individuals from within relevant functions of the Bank – including from Legal … HR and Compliance as well as senior business representation. The ESG was formalised in July 2011….

15.

To carry out its purpose in overseeing the conduct of the Bank’s responses to the Regulatory Investigations…the ESG held conference calls with Clifford Chance, SJ Berwin and on occasions other of the Bank’s external legal advisors on a regular basis from July 2011 onwards. These meeting provided a forum for the ESG to discuss with the Bank’s external legal advisors the status of the Regulatory Investigations and communication with regulators around the world, with the Bank’s legal advisors providing advice and analysis on issues and next steps, so the ESG could make decisions appropriately and provide further instructions as necessary…

16.

Clifford Chance would take the lead for each of the ESG meetings (essentially thereby also acting as the secretariat for the meetings), setting - in conjunction with the Bank’s internal legal advisors – the agenda and circulating advice on the Regulatory Investigations … Clifford Chance, SJ Berwin and on occasions other of the Bank’s legal advisors would then attend the meetings (held by telephone conference) to discuss the Regulatory Investigations with the members of the ESG. The ESG would, for instance, ask to be advised and updated on the issues arising in the Regulatory Investigations, and what should be done next.…”

Mr. de Gruchy then classified the ESG High Level Documents into two types:

“20.

The first type of ESG High Level Documents are confidential memoranda in the form of tables prepared by Clifford Chance, which advised and updated the ESG on the progress, status and issues arising in the Regulatory Investigations (falling within the set of documents described above as the “updates” prepared by Clifford Chance for the ESG). These memoranda formed the basis of discussions at the ESG meetings regarding the Bank’s proposed strategy and Clifford Chance’s advice in relation to the Regulatory Investigations. In effect, they formed part of the continuous exercise of advising and updating the ESG on the Bank’s position in relation to the Regulatory Investigations, providing the ESG with the opportunity to give further instructions on behalf of the Bank to Clifford Chance (and/or other of the Bank’s external legal advisors) or otherwise to seek further advice in relation to the Regulatory Investigations.

21.

The second type of ESG High Level Documents are confidential notes/summaries drafted by Clifford Chance concerning the discussions between the ESG and its legal advisors at the ESG meetings. These notes, by their nature (given their authorship) reflect Clifford Chance’s views on the Regulatory Investigations, as Clifford Chance determined the information to be included in the notes. Clifford Chance would circulate these notes after each ESG meeting, thereby in effect also constituting the summary “minutes” of the discussions between the ESG and its legal advisors at the ESG meetings.”

Mr. de Gruchy’s evidence emphasised that all of the ESG High Level Documents were produced by Clifford Chance for the ESG, that they were expressly marked “privileged and confidential”, and they were all communicated by Clifford Chance to the ESG either before or following the ESG meetings.

Having reviewed the ESG High Level Documents for myself, I confirm that Mr. de Gruchy’s description of the format of the documents in the first sentence of each of paragraphs 20 and 21 of his witness statement is accurate.

I would supplement Mr. de Gruchy’s evidence by indicating, as I did to the parties at the hearing without opposition from Mr. Railton QC who appeared for RBS, that the table in the earlier documents in the first category contains four columns headed “Authority/Litigation”, “Applicable Rates”, “Comment” and “Status”. In later documents the “Status” column is omitted and replaced by a “Next Steps” remark in each box in the “Comment” column.

I would also indicate (as I did at the hearing) that in general terms, a more appropriate description of the first type of document would be that the tables “informed and updated” the ESG on the progress status and issues in the regulatory investigations, rather than “advised and updated” the ESG. The term “advised” is a rather loaded term in the current context, and, on inspection, it is clear that many of the relevant entries in the body of the documents were no more than a brief factual recital of a recent event that had occurred or which was scheduled. By way of example, the documents included references to matters in the public domain such as the launch of investigations by regulators or litigation by clients, and non-public matters such as meetings and correspondence with different regulators that would not, by their nature, have been privileged occasions or correspondence.

So far as Mr. de Gruchy’s evidence as to the provenance and communication of the ESG High Level Documents is concerned, it is clear from the face of the documents that they were all prepared by Clifford Chance and I accept the evidence that they were all sent by Clifford Chance to the members of the ESG. The first category of documents (the tabular memoranda) appear to have been produced and updated on a regular basis between August 2011 and December 2013. The second category of documents (the summary minutes) relate to telephone meetings of the ESG which appear to have taken place at least monthly between March 2012 and November 2012.

It will be apparent from those dates that there were a number of the tabular memoranda that were prepared several months before the first meeting of the ESG for which I have been given minutes, and that they continue to have been prepared periodically for about a year after the last ESG meeting for which I have seen minutes. The explanation for this, given to me on instructions by Mr. Railton, is that the ESG continued to meet regularly after November 2012 and that the tabular memoranda were produced by Clifford Chance for the purposes of those meetings, but that the summary notes of such later meetings were not, by their subject-matter, considered to be “high level” documents and hence were not included within the category of ESG High Level Documents.

I should also record that Mr. Railton made it clear, and I accept, that his non-objection to my supplementing Mr. de Gruchy’s description of the ESG High Level Documents in the way that I have above was not intended to be, and should not be taken to be, any waiver by RBS of any privilege attaching to the documents.

There was no dispute between the parties as to the basic requirements for a claim to legal advice privilege. They were set out by Lord Rodger in Three Rivers District Council v Bank of England (No.6) [2004] UKHL 48, [2005] 1 AC 610 at para 50,

“In the formulation of Millett J in Price Waterhouse v BCCI Holdings (Luxembourg) SA [1992] BCLC 583, 588d-e legal advice privilege attaches to all communications made in confidence between solicitors and their clients for the purpose of giving or obtaining legal advice even at a stage when litigation is not in contemplation. It does not matter whether the communication is directly between the client and his legal adviser or is made through an intermediate agent of either.”

It was also not disputed between the parties that, as Taylor LJ indicated in Balabel v Air India [1988] 1 Ch 317 at page 330G,

"… legal advice is not confined to telling the client the law; it must include advice as to what should prudently and sensibly be done in the relevant legal context".

The areas of debate as to the proper extent of legal advice privilege in this and other cases have tended to arise from two sources: first, the fact that, over the years, solicitors have, in addition to offering legal advice, tended to offer their clients a range of what might loosely be described as “business” services; and secondly, that not all communications between a solicitor and his client will necessarily be for the purpose of giving or obtaining legal advice.

The former question was addressed in Three Rivers (No.6) in the context of a claim to legal advice privilege by the Bank of England in respect of communications between its “inquiry unit” and the Bank’s solicitors as regards the presentation of the Bank’s evidence to the Bingham Inquiry into the Bank’s supervision of Bank of Credit and Commerce International. Lord Scott said, at para 38,

“I would venture to draw attention to Taylor LJ's reference [in Balabel] to "the relevant legal context". That there must be a "relevant legal context" in order for the advice to attract legal professional privilege should not be in doubt. Taylor LJ said, at p 331, that

"to extend privilege without limit to all solicitor and client communication upon matters within the ordinary business of a solicitor and referable to that relationship [would be] too wide".

This remark is, in my respectful opinion, plainly correct. If a solicitor becomes the client's "man of business", and some solicitors do, responsible for advising the client on all matters of business, including investment policy, finance policy and other business matters, the advice may lack a relevant legal context. There is, in my opinion, no way of avoiding difficulty in deciding in marginal cases whether the seeking of advice from or the giving of advice by lawyers does or does not take place in a relevant legal context so as to attract legal advice privilege. In cases of doubt the judge called upon to make the decision should ask whether the advice relates to the rights, liabilities, obligations or remedies of the client either under private law or under public law. If it does not, then, in my opinion, legal advice privilege would not apply. If it does so relate then, in my opinion, the judge should ask himself whether the communication falls within the policy underlying the justification for legal advice privilege in our law. Is the occasion on which the communication takes place and is the purpose for which it takes place such as to make it reasonable to expect the privilege to apply? The criterion must, in my opinion, be an objective one.”

Lord Rodger stated, at para 58,

“In his important judgment in Balabel v Air India [1988] Ch 317, 331h-332b, Taylor LJ seems to have thought that in the past the business of solicitors was more restricted than it is today and that there is therefore now more of a need to keep legal advice privilege within justifiable bounds. In the present case the Court of Appeal [2004] QB 916, 933, para 30 adopted that observation. As counsel for both parties accepted, however, what Taylor LJ says in that passage is, at best, an over-simplification. Especially in the 19th century, many solicitors or attorneys acted as "men of business". They not only gave legal advice and assistance but carried on business… Given the varied functions performed by lawyers, it is scarcely surprising that questions frequently arose as to the capacity in which the lawyer or firm was acting in a particular transaction…. Lawyers today may be instructed in situations in which they would not have been instructed in the past or which did not even exist in the past; equally, however, lawyers in the past were employed in situations in which they would not be employed today and which do not even exist today. In relation to legal advice privilege what matters today remains the same as what mattered in the past: whether the lawyers are being asked qua lawyers to provide legal advice.”

Finally, Lord Carswell stated, at para 111,

“I agree with the view expressed by Colman J in Nederlanse Reassurantie Groep Holding NV v Bacon & Woodrow Holding [1995] 1 All ER 976, 982 that the statement of the law in Balabel does not disturb or modify the principle affirmed in Minter v Priest [1929] 1 KB 655, that all communications between a solicitor and his client relating to a transaction in which the solicitor has been instructed for the purpose of obtaining legal advice will be privileged, notwithstanding that they do not contain advice on matters of law or construction, provided that they are directly related to the performance by the solicitor of his professional duty as legal adviser of his client.”

The second question was addressed by Taylor LJ in Balabel. At first instance, HHJ Paul Baker QC had adopted a narrow view of the scope of legal advice privilege. He had said,

"The [defendant] in my judgment [is] entitled to withhold all communications which seek or convey advice, even though parts of them may contain narratives of facts or other statements which in themselves would not be protected. On the other hand, documents which simply record information or transactions, with or without instructions to carry them into execution, or which record meetings at which the plaintiffs were present, are not privileged."

Taylor LJ conducted a review of the earlier authorities and stated, at pages 330D-G (emphasis added),

“Although originally confined to advice regarding litigation, the privilege was extended to non-litigious business. Nevertheless, despite that extension, the purpose and scope of the privilege is still to enable legal advice to be sought and given in confidence. In my judgment, therefore, the test is whether the communication or other document was made confidentially for the purposes of legal advice. Those purposes have to be construed broadly. Privilege obviously attaches to a document conveying legal advice from solicitor to client and to a specific request from the client for such advice. But it does not follow that all other communications between them lack privilege. In most solicitor and client relationships, especially where a transaction involves protracted dealings, advice may be required or appropriate on matters great or small at various stages. There will be a continuum of communication and meetings between the solicitor and client … Where information is passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required, privilege will attach. A letter from the client containing information may end with such words as "please advise me what I should do." But, even if it does not, there will usually be implied in the relationship an overall expectation that the solicitor will at each stage, whether asked specifically or not, tender appropriate advice.”

Taylor LJ acknowledged the need to keep legal advice privilege within justifiable bounds, but held that HHJ Paul Baker’s formulation of the principle had been too narrow. He concluded, at page 332B-D,

“… the formulation adopted by Judge Paul Baker and quoted earlier in this judgment is in my view too restrictive. It suggests that a communication only enjoys privilege if it specifically seeks or conveys advice. If it does so, it is privileged, notwithstanding it may also contain "narratives of facts or other statements which in themselves would not be protected." However, the second half of the judge's formulation implies that all documents recording information or transactions with or without instructions or recording meetings lack privilege if they do not specifically contain or seek advice … In my judgment that formulation is too narrow. As indicated, whether such documents are privileged or not must depend on whether they are part of that necessary exchange of information of which the object is the giving of legal advice as and when appropriate.”

Applying these principles to the two types of ESG High Level Documents, I am first entirely satisfied that Clifford Chance, who were the authors of the documents, were engaged by RBS in (to use Taylor LJ’s words) “a relevant legal context”. The evidence to which I have referred above makes it clear that RBS was facing Regulatory Investigations in a number of jurisdictions that could have had (and did have) the consequence that RBS was subjected to very large regulatory penalties and consequent private actions for very significant sums of money. Dealing with, and co-ordinating the communications and responses to such regulators was a serious and complex matter upon which RBS naturally wished to have the advice and assistance of specialist lawyers. Clifford Chance were engaged to provide such advice and assistance, and (to use Lord Scott’s words), that advice and assistance undoubtedly related to the rights, liabilities and obligations of RBS, and the remedies that might be granted against it either under private law or under public law.

I am also entirely satisfied that, in the words of Taylor LJ in the extracts from Balabel to which I have referred, the two types of ESG High Level Documents form part of “a continuum of communication and meetings” between Clifford Chance and RBS, the object of which was the giving of legal advice as and when appropriate.

First, the tabular memoranda prepared for the ESG meetings fall precisely into the type of documents described by Taylor LJ as, “information … passed by the solicitor or client to the other as part of the continuum aimed at keeping both informed so that advice may be sought and given as required”. The tables do not in terms ask the question, “What do you want us to advise you on?” but their purpose was clearly to provide a comprehensive and up-to-date summary of developments in the Regulatory Investigations as the basis for the discussions at the regular meetings between the ESG and its legal advisers.

Secondly, the summary minutes of the meetings of the ESG show that the lawyers from different jurisdictions supplemented the contents of the tables with reports and references to some of the meetings which they had attended and the communications which they had had with regulators on behalf of RBS. Importantly, the lawyers also gave their impressions of those matters, they responded to questions as to RBS’s position, and they gave their suggestions as to what RBS should do next in the context of the Regulatory Investigations. The role of the lawyers at such meetings was to convey information to the members of the ESG and to provide them with legal advice.

Mr. Lord QC, who appeared for PAG, submitted that even if legal advice privilege attached to some parts of the ESG High Level Documents, it would be extremely unlikely that such privilege could attach to the documents in their entirety. He observed that the ESG had a wider remit than simply receiving legal advice, and suggested that not all of the information given to it, or the minutes of decisions that it took, could be privileged. He submitted, for example, that references in the documents sent to the ESG to information concerning public events or to any dealings with regulators would not be privileged. Mr. Lord also sought to draw an analogy between minutes of the strategic decisions taken by the ESG, and minutes of decisions taken by a board of directors, which he said would not be privileged. In that latter respect he referred to the decisions of David Richards J in Financial Services Compensation Scheme v Abbey National Treasury Services plc [2007] EWHC 2868 (Ch) and of Ramsey J in Atos Consulting v Avis plc (No. 2) [2007] EWHC 323 (TCC). Accordingly, he submitted, whilst any direct references in the documents to legal advice received from Clifford Chance or from the other lawyers could be redacted, the remainder of the documents should be provided to PAG.

I do not accept these submissions. As I have indicated above, in Balabel, Taylor LJ held that all documents forming part of the continuum of communications between lawyer and client for the purposes of obtaining legal advice would be privileged, even if they did not expressly refer to legal advice, provided that they were part of the “necessary exchange of information of which the object is the giving of legal advice as and when appropriate”. It is therefore quite clear that the communication of information between a lawyer and client can be privileged, provided that it is information that is communicated in confidence for the purposes of the client seeking, and the lawyer giving, legal advice. The test is one of relevance and purpose: the source of the information makes no difference.

At page 331B-G of Balabel, Taylor LJ gave some examples of lawyer/client communications that would not be privileged. These were of communications unrelated to the obtaining of legal advice, such as a client simply notifying a solicitor of the sale of a property, or asking him to collect rents from tenants whilst the client was on holiday. These examples are, however, very far removed from the ESG High Level Documents. The Clifford Chance tabular memoranda were entirely focussed on providing the information concerning the Regulatory Investigations which the ESG needed to know: they did not contain extraneous material. Further, so far as I can detect, the summary minutes of the ESG meetings were similarly focussed and do not appear to have recorded discussions or decisions taken on matters unrelated to the Regulatory Investigations with which the lawyers were continuing to deal.

I also do not think that the decisions in FSCS and Atos Consulting assist PAG. In FSCS, the issue was whether legal advice privilege attached to questions and answers and part of the narrative in internal checklists compiled by FSCS staff when assessing the eligibility of investors for compensation under the scheme. Such questions and answers and parts of the narrative were said either to state or to enable the reader to infer the substance of the legal advice regarding the claim that had been given to the FSCS staff by the FSCS’s legal department.

David Richards J recorded, at paragraph 9 of his judgment, that it was not in dispute that legal advice privilege applied to advice received from internal lawyers as well as external lawyers; and that as well as covering communications between a client and his lawyer for the purpose of obtaining and giving legal advice, the privilege also extended to any record of the advice made within the client’s organisation, whether by way of “copy, summary or paraphrase”: see Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) (The Good Luck) [1992] 2 Lloyd’s Rep 540.

On that basis, and having reviewed the documents, David Richards J upheld claims to privilege in respect of all but one of the redactions, which he held stated the legal advice received. The remaining redaction did not amount to a statement of the legal advice, but the FSCS asserted that the advice given could be inferred from the question that had been redacted. David Richards J held that legal advice privilege could not be claimed on the basis of mere inference, unless perhaps the inference was so obvious and inevitable as to be tantamount to a statement of the advice. However, he nonetheless upheld the claim to privilege on the basis that the question and its answer could not be disassociated from the other privileged questions and answers.

The FSCS case, therefore, was concerned solely with whether redactions could be made to an internal document of the client so as to protect the privilege that attached to legal advice that had been contained in a different communication that had passed between the client and its lawyers.

The Atos Consulting decision was also a case involving redactions made on the grounds of privilege and/or irrelevance in board minutes and supporting board papers of Avis. It did not concern claims to privilege or redactions in any documents passing between Avis and its lawyers.

The principles set out in the FSCS and Atos Consulting cases would therefore be relevant, for example, to a claim to redact part of an internal company minute that referred to irrelevant material, or which referred expressly or by obvious inference, to advice received from the company’s solicitor as the basis for a decision taken by the board. The cases might also have been relevant if some of the ESG High Level Documents had been prepared by the ESG itself, recording its deliberations or decisions. But neither case stands as authority for the proposition that a litigant has to perform an exercise of redacting and disclosing privileged communications sent to him in confidence by his lawyer.

Mr. Lord submitted that this was an illogical distinction to draw in the context of the ESG. He submitted that the ESG was essentially acting in a supervisory or managerial role in relation to part of RBS’s business, and that if briefing papers listing the Regulatory Investigations or minutes of its meetings had been prepared internally by an RBS employee, those documents would not have been privileged and would have had to be disclosed, albeit with any references to legal advice redacted. Mr. Lord also suggested that Clifford Chance’s role was not confined to providing legal advice, and he drew attention to Mr. de Gruchy’s statement that Clifford Chance was “essentially … also acting as the secretariat for the meetings”. So, Mr. Lord submitted, it could not be right that legal advice privilege could attach simply because the briefing papers, agendas and minutes had been prepared by a law firm and sent to the ESG rather than being prepared internally at RBS.

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. The same might also apply if, for example, a law firm was asked to send press cuttings from its own library to its client for the purposes of a board meeting because the client’s own public relations department could not find them. But in either case that would be because the court would have taken the view that the lawyer was not “being asked qua lawyer to provide legal advice” (per Lord Rodger in Three Rivers (No.6)). The lawyer would simply have been asked to take the minutes or collect the press cuttings and to supply them to his client because it was convenient for him to do so.

But that is not the case here, and Mr. de Gruchy’s description of Clifford Chance’s role as “also acting as the secretariat for the meetings” (my emphasis) should not be taken out of context. The documents and Mr. de Gruchy’s evidence show that Clifford Chance did not organise or attend the ESG meetings simply, or even primarily, to provide administrative support to the ESG. The ESG meetings all had a very substantial legal content and it is no surprise that (as Mr. de Gruchy indicated) the lawyers present 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.

Finally, and for completeness, I should briefly address the additional question suggested by Lord Scott in paragraph 38 of his speech in Three Rivers (No.6) of whether the communications in the ESG High Level Documents fall within the policy underlying the justification for legal advice privilege. That policy was described in a number of judicial dicta that were collected and referred to with apparent approval by Lord Scott in paragraphs 30-33 of his speech, and in his own exposition of the policy at paragraph 34. Many of those dicta stressed, and Lord Scott accepted,

“…that in the complex world in which we live there are a multitude of reasons why individuals, whether humble or powerful, or corporations, whether large or small, may need to seek the advice or assistance of lawyers in connection with their affairs; they recognise that the seeking and giving of this advice so that the clients may achieve an orderly arrangement of their affairs is strongly in the public interest; they recognise that in order for the advice to bring about that desirable result it is essential that the full and complete facts are placed before the lawyers who are to give it; and they recognise that unless the clients can be assured that what they tell their lawyers will not be disclosed by the lawyers without their (the clients') consent, there will be cases in which the requisite candour will be absent...”

However, as the decision in Balabel and the cases in the United States, Australia and New Zealand to which Lord Scott referred make clear, the policy justification for legal advice privilege cannot be limited to a need to encourage a client to make candid disclosure to his lawyer of all relevant matters without fear that what he reveals will later be disclosed to others without his consent. 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.

Communications between a lawyer and his client in the context of a regulatory investigation are no different. 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. In my judgment, the ESG High Level Documents all fall squarely within that policy.

I therefore uphold RBS’s claim to legal advice privilege in respect of all of the ESG High Level Documents that I have inspected.