BCCI Judgement Will Dent Lawyer/Client Confidentiality

by Robin Pilgrim, LawAndTax-News.com, London

03 March 2004

The long-lasting BCCI affair, in which liquidators of the bank, which collapsed twenty years ago, are currently suing the Bank of England for misfeasance in public office, has thrown up a judgement with potentially serious effects for the established principle of lawyer/client confidentiality.

The Court of Appeal ruled on Monday that communications between the Bank's solicitors and officials who liaised with the inquiry into the BCCI collapse should be made available to the liquidators. "We cannot see that . . . communications between the Bank and the solicitors who were assisting in the obtaining, preparation and presentation of evidence and submissions to the inquiry should attract privilege, even if the Bank was anxious that this assistance should enable the Bank's role to be presented in the best possible light," said the Court in its judgement.

Their Lordships said that they couldn't see why lawyer-client correspondence should be privileged if it took place at a time when litigation was not anticipated, and suggest that the law reform committee should re-visit the question of privilege.

The ruling is a victory for the liquidators, who can now force the Bank of England to reveal more about the legal advice it received prior to litigation over BCCI's collapse. The liquidators' lawyers, Lovells, said that the new material could shed considerable light on the Old Lady's reluctance to supervise BCCI.

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