Liquidators win disclosure victory in BCCI showdown

Gordon Pollock QC today won a Court of Appeal victory forcing the Bank of England to disclose certain communications with its law firm, Freshfields Bruckhaus Deringer, that the bank had sought to keep secret.

The Court of Appeal upheld Mr Justice Tomlinson’s High Court decision that correspondence between the Bingham Inquiry Unit and Freshfields did not attract legal advice privilege.

There could be as many as 75 boxes of potentially relevant papers that will now have to be disclosed to BCCI’s liquidators, advised by Pollock and Lovells.

“The Court of Appeal has confirmed that the Liquidators were right to ask for these documents. These will shed yet further light on the Bank’s declared reluctance to supervise BCCI,” said Lovells’ lead partner on the case, Christopher Grierson. “The Bank’s persistent refusal to disclose these documents has caused delay and will add to the costs.”

Legal advice privilege attaches to communication between a client and solicitor where the primary object of the relationship was to obtain assistance that required knowledge of the law. However, the Court of Appeal found that the role of the solicitor had expanded and that such protection will not automatically be available where the dominant purpose is not in obtaining advice in relation to legal rights and obligations.

The court’s decision paves the way for a review of the law of legal advice privilege.

“We have found this area of law not merely difficult but unsatisfactory. Legal advice privilege attaches to matters such as the conveyance of real property or the drawing up of a will. It is not clear why it should,” the Court of Appeal judgment, concludes. “There would seem little reason to fear that, if privilege were not available in such circumstances, communications between solicitor and client would be inhibited. Nearly 50 years have passed since the Law reform Committee looked at this area. It is perhaps time for it to receive a further review.”