Three Rivers Council & Ors v Bank of England

Mr Justice Tomlinson:

1. A point has arisen out of the judgment on legal professional privilege which I

delivered on 13 December 2002. This judgment which contains my ruling on that point should be regarded as an addendum to the earlier judgment.

2. The point arises out of the description of the exercise carried out by the BIU which is contained in Messrs Freshfields’ letter of 19 July 2002 from which I made extensive citation in paragraph 8 of my judgment. The point is whether the material generated by contact between the BIU and persons who were by then former employees or officers of the Bank is privileged from disclosure. As that passage made clear and as is confirmed by subsequently filed evidence, no distinction had been drawn in the Bank’s evidence prepared for the argument on privilege, so far as it related to communications between the BIU and Bank officers, between existing and former officers of the Bank. Former bank employees were treated for the purpose of such communications as part of the Bank’s team in the context of the Bingham Inquiry.

3. No list has been compiled of former officers of the Bank with whom the BIU consulted with the relevant purpose. They include however Lord Richardson, the Governor of the Bank between 1973-1983 and Mr Peter Cooke, the Head of the Banking Supervision Division of the Bank between 1976-1985. In the nature of the exercise the persons with whom the BIU consulted in this regard were senior personnel who had during their tenure of office at or their employment by the Bank been concerned with the supervision of BCCI. Such relevant information as they had had only been obtained in their capacity as officers of the Bank and was incidentally covered by the confidentiality provisions of the Banking Acts, over and above such duties of confidence as may have been owed by them to the Bank arising out of their employment.

4. The Claimants say that persons such as Lord Richardson and Mr Cooke should, by virtue of the fact that they were no longer officers of or employed by the Bank at the time of the relevant exercise conducted by the BIU, be regarded as “third parties” in terms of the statement of principle which I essayed in paragraph 30 of my judgment, so that the documents generated which evidence communications with them are not protected from disclosure notwithstanding the dominant purpose of their creation was that they or their contents be used to obtain legal advice. In my judgment this is neither the correct nor an appropriate approach. It would subvert the rationale for legal advice privilege as I sought to identify it and would create very great difficulties for corporations which, as I observed in paragraph 30 of my judgment, can act only through individuals.

5. In communicating with its former officers for the relevant purpose the Bank was ascertaining the extent of the knowledge which it in fact had, through those officers, at the time or during the period relevant to the Inquiry which Bingham LJ was conducting. It would not have been possible for the Bank to provide to its legal advisers a complete picture of its own relevant contemporary knowledge without including the information which was known to its former officers, and thus to it, at the relevant times. The advice which was required was advice which could only be given on a sound factual basis if the information supplied to the legal advisers by the Bank consisted of a full account of all such facts and matters as would be regarded as known to the Bank at the times relevant to the Inquiry.

6. In the light of those considerations the rationale behind legal professional privilege would be subverted not served by denying protection to relevant evidence of communications with former officers – by relevant I mean of course material which at its creation satisfies the dominant purpose test. Former officers being asked about their relevant knowledge are in no sense analogous to the surveyors, external loss adjusters, fire experts and accountants whose position was discussed in Wheeler v. Le Marchant and Re Highgrade Traders Ltd. Those persons were being asked for information which at no time material to the legal advice which was being sought represented knowledge which would be attributed to the “client” by virtue of its possession by those persons. In my judgment the former officers of the Bank who were concerned with the supervision of BCCI and who in that capacity acquired relevant knowledge which was confidential to the Bank are not for this purpose to be regarded as third parties. The relevant communications between the BIU and such persons and evidence of the same are protected by legal advice privilege. Any other conclusion would be unduly restrictive of the ability of a corporation in modern conditions to prepare in confidence for consultation with its legal advisers.

7. In the light of this conclusion I need express no view on Mr Stadlen’s alternative contention that the Bank may in respect of the relevant communications or material rely upon common interest privilege. That argument can if necessary be pursued elsewhere without any need for me to make any relevant factual findings.