Implications Of Bank Of England Privilege Case Are Huge, Says Expert

by Robin Pilgrim, LawAndTax-News.com, London

30 March 2004

Speaking to the Butterworths legal publishing firm this week, Philippa Bennett, a partner in DLA's litigation group suggested that a recent Court of Appeal ruling on legal privilege in the case of Three Rivers District Council v Governor and Company of the Bank of England will send a "shockwave" through the legal profession.

In the wake of the collapse of the Bank of Credit and Commerce International (BCCI), the Three Rivers District Council, in conjunction with BCCI's liquidators and creditors, sued the Bank of England, alleging that it had failed to adequately supervise the bank.

The district council called for disclosure by the Bank of England of communications between it and its legal advisers, Freshfields, during the Bingham Inquiry.

Ruling earlier this month, Lord Phillips upheld a lower court ruling delivered in November 2003 which stated that the Bank of England could only claim legal advice privilege for communications seeking advice about its rights and obligations, and not for communications on presentational matters for the Bingham Inquiry.

Explaining that the Court of Appeal had found that "Freshfields wasn't in that type of relationship. The advice they were giving was presentational," Ms Bennett went on to observe that:

"It seems legal advice privilege is not what we all thought it was. I think a lot of lawyers assumed that most if not all communications between lawyer and client were privileged."

She additionally suggested to Butterworths that the Bank of England is likely to appeal to the House of Lords over this matter.

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