Documents prepared by magic circle firm Clifford Chance for Royal Bank of Scotland dealing with the fallout from the Libor scandal are protected by legal privilege, a High Court judge has ruled, asserting that lawyers should be able to give ‘candid factual briefings’.

As part of a claim RBS is facing from the Property Alliance Group over its involvement in the rate-rigging scandal, the bank was asked to disclose high-level documents prepared for a special committee at RBS. The bank claimed these were privileged.

At a previous hearing Mr Justice Birss ordered that a set of these documents, which included meeting minutes and confidential memoranda, be inspected by another judge to determine whether the bank’s claim should be upheld.

Ruling in Property Alliance Group v Royal Bank of Scotland, Mr Justice Snowden (pictured) said: ‘There is a clear public interest in regulatory investigations being conducted efficiently and in accordance with the law. The 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.’

He ruled that the high-level documents in question ‘fall squarely within that policy’.

The issue arose out of a claim from the Property Alliance Group that RBS had induced it to enter into four interest-rate swap agreements between 2004 and 2008. 

The debate over the documents centred on the proper extent of legal privilege, given the fact solicitors now tend to offer clients a wide range of ‘business services’, and that not all communications between a solicitor and client will necessarily constitute legal advice.

Lawyers for the Property Alliance Group argued that Clifford Chance’s role was not confined to providing legal advice, referencing a witness statement by Paul de Gruchy, a senior legal counsel at RBS, that the magic circle firm was ‘also acting as the secretariat for the meetings’.

Tim Lord QC argued that legal privilege should not be given simply because the briefing papers, agendas and minutes were prepared by a law firm.

Snowden agreed that if a solicitor becomes responsible for advising clients on all matters of business, the advice may lack the relevant legal context to be classed as privileged.

But the judge said Clifford Chance was not providing those services as a ‘simple matter of administrative convenience’ but rather as an ‘integral part of their provision of legal advice and assistance’.