Property Alliance v RBS
Privilege arguments where a party is being investigated by a regulator
http://www.bailii.org/ew/cases/EWHC/Ch/2015/1557.html
The underlying dispute in this matter relates to the manipulation of LIBOR (in respect of which the defendant has reached certain settlements with various regulators). The claimant sought disclosure of various "high level" documents from the defendant. The defendant claimed privilege over several of these documents and the following issues arose:
(1) Could legal advice privilege be asserted over documents produced by an Executive Steering Group ("ESG") set up by the defendant? Although not a sub-committee of the Board, it was "plainly an important committee operating at the highest levels". The claimant sought to rely on a statement by Richards J in FSCS v Abbey National (see Weekly Update 47/07) that board minutes are a "common example" of a document which is "clearly not privileged". However, Birss J held that the key issue was the precise nature of the role undertaken by the ESG. Here, it was likely that the ESG had reported factually about the outcome of investigations and so it was "hard to credit" that its sole purpose had been to provide legal advice, notwithstanding the involvement of the defendant's solicitors with the work of the ESG. Accordingly, the judge ordered inspection of these documents by the court in order for the issue of privilege in these documents to be decided.
(2) Could litigation privilege be claimed over certain documents? The claimant argued that litigation privilege could not arise where an inquiry was being conducted to get to the bottom of the facts (and hence could not be said to be adversarial litigation). The judge did not need to decide this point, though, since all the documents in question were already covered by legal advice privilege. Although there is disagreement between academic authors on this point, Birss J held that "it would not be unreasonable for a lawyer to approach claims to privilege on the basis that the litigation privilege and legal advice privilege overlap" and are not mutually exclusive.
(3) Could without prejudice privilege be claimed over communications between the defendant and regulators? The claimant argued that without prejudice cannot be claimed in the context of a regulatory investigation resulting in a finding of misconduct and the imposition of a penalty. That argument was rejected by the judge, who found that "the public policy on which the without prejudice privilege rule is based is capable of applying in order to promote settlement of FCA investigations". However, the privilege cannot be maintained where (as here) the firm puts in issue before a court the basis on which a Final Notice was produced.
(4) Waiver: The defendant had provided certain documents to a regulator. Those documents were provided on the basis that confidentiality and privilege would be preserved, although there were "carve-outs" to preserve the rights of the regulator to make further disclosure in the performance of its statutory duties or as otherwise required by law. The judge agreed that privilege could be claimed by the defendant over these documents and "that should not be undermined by the existence of the carve outs". The documents had been provided on only a limited basis.
PA(GI) Ltd v CICL 2013 Limited
Whether liabilities for possible PPI mis-selling were transferred under a Part VII scheme/the meaning of "attaching to" a policy
http://www.bailii.org/ew/cases/EWHC/Ch/2015/1556.html
The claimant sold PPI policies up to 2004. In 2003 its creditor insurance business was sold to the claimant. That business was then transferred to Groupama in 2006 by means of a Part VII scheme. The issue in this case was whether the claimant's potential liabilities in respect of the alleged mis-selling of its PPI policies were transferred to Groupama. (Because liability to pay compensation might arise because of a complaint made under the FOS scheme (and therefore independently of any legal liability), the mis-selling claims would not be time-barred).
This issue turned on the meaning of "Transferred Liabilities", which were defined under the scheme as "liabilities of the transferor...under or attaching to the Transferred Policies" (emphasis added). The Transferred Policies included the non-life component of the PPI policies. Andrews DBE J noted that the scheme had not referred expressly to the PPI policies, which she thought was significant since an intention to make provision for the transfer of mis-selling liabilities would have qualified as an "unusual feature" which might have a material financial impact on the scheme.
The judge went on to find that liability for mis-selling plainly did not arise "under" a PPI policy, the insurer's primary liability being its liability to pay claims in the event of an insured loss (see Sprung v Royal Insurance [1997]).
The phrase "attaching to" was held to be understood "as a reference to a liability that is directly connected with, or emanates from, the contract itself, arising after that contract has come into existence. It would not readily be understood as referring to a liability for an actionable wrong which preceded or gave rise to the contract". It did not matter that that interpretation added little or nothing to "liability under" a policy. Furthermore, the interpretation argued for by the claimant would have the effect of treating "attaching to" as meaning the same as "relating to", which is a wider expression.
Furthermore, the conclusion that the mis-selling liabilities would remain with the client also made sense commercially, since Groupama would receive no premium income in respect of this business (the liabilities in question having arisen long before the scheme, since the claimant had ceased writing PPI insurance two years earlier).
COMMENT: One minor reference by the judge in this case is of wider interest. He confirmed the correctness of Sprung v Royal Insurance [1997] which is cited as the basis for the principle that an insured cannot claim damages for late/non-payment of an insurance claim under English law. Although the Law Commissions have criticised Sprung during their project to reform insurance contract law, this case confirms it is still supported by the judiciary (albeit only a passing reference was made to the case here (and this was not in relation to late payment damages)).
JSC Mezhdunarodniy v Pugachev
Whether passport order should be varied to allow defendant to attend court hearing in France
http://www.bailii.org/ew/cases/EWHC/Ch/2015/1586.html
The defendant applied to vary an order requiring him to surrender his passport (granted because of his continued failure to comply with his disclosure obligations after a worldwide freezing order was made against him). The defendant had commenced proceedings in France before the claimants had started the English proceedings against him. He claimed he needed his passport in order to attend a court hearing in Paris (failing which, his claim might be dismissed by the French courts).
Hildyard J noted the applicable legal principles for this application – proportionality and the need for the restriction to be necessary (ie it is just and reasonably required to give the fullest effect to the freezing order). In the circumstances of this case, he found that the defendant's "flight risk" was sufficient to warrant refusing suspension of the order. The defendant had offered to travel with a companion (for example his solicitor) who could retain his passport at all times except on presentation to border control. However, the judge held that that would not be sufficient protection: "The proposed stay is overnight when constant supervision might be difficult; and once in France, he could, if determined to do so, travel to Schengen states without a passport".
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