A Financial List judge has determined Dentons and Royal Bank of Scotland to be “cavalier” in failing to comply with a disclosure order handed down last year in the case of Property Alliance Group Limited v Royal Bank of Scotland.
The Lawyer’s Tabby Kinder reported in an article titled High Court slams Dentons and RBS for “cavalier” attitude to disclosure that Financial List and Chancery High Court judge, Mrs Justice Asplin, criticised RBS and its lawyers, Dentons, for their failure to comply with a disclosure order of the court.
Asplin J reportedly said she was “particularly concerned” about RBS’s failure to comply with a previous disclosure order that required RBS’s lawyers to hand over around 25 million documents made up of “high level” internal reports, reviews and summaries relating to the allegations of Libor misconduct.
What is Litigation Disclosure?
Disclosure (formerly discovery) is a stage of litigation in which the parties disclose documentary evidence by list to each other. Only documents that are relevant because they support or undermine a parties case must be disclosed. Standard disclosure occurs after each party has set out its position in statements of case (formerly pleadings).
Importance of Disclosure in Litigation
Disclosure is a fundamental litigation process whereby, in summary, each party produces all documents they hold or have control over, which are relevant to the litigation regardless of whether they assist or harm their case. Lawyers, as officers of the court, are effectively tasked with ensuring their clients comply with disclosure obligations.
The rules around disclosure are designed to ensure a fair and just outcome is reached in the litigation and that all relevant and disclosable documents are seen by both sides. Banks are not in a special class of litigant and must comply with the CPR like any other party to litigation and their legal advisors should ensure compliance.
Unfortunately, this is not the first time that RBS and Dentons have failed in respect of adequate disclosure in litigation proceedings.
Examples of RBS Disclosure misconduct
Firstly, in a recent unreported decision by Chief Master Marsh in the case of Chaudhry v. RBS [1] the bank were forced to redo their standard disclosure exercise and hand over documents relating to the bank’s FCA-agreed review over its past sales of Interest Rate Hedging Products (the IRHP Review).
RBS and Dentons had wrongly argued and maintained that the documents generated by and held within the IRHP Review were not disclosable in a claim for the mis-selling of the same IRHP. The bank drafted in heavyweight silk, Adrian Beltrami QC, to rehearse this meritless argument at great cost.
Secondly, RBS were also found, by the Court of Appeal in 2013, to to have deliberately and dishonestly failed to disclose relevant documents and thereby, remarkably, obtained judgment by fraud in the case of RBS v Highland Financial Partners [2]. It was held that RBS had misled their client, their own lawyers and the court.
Thirdly, RBS’ conduct in litigation it pursued in Scotland against Derek Carlyle in 2010 (Royal Bank of Scotland Plc v Carlyle [2010] ScotCS CSOH_3) [3] was found by the Court of Session, per Lord Glennie, to fall far below the required standards. The learned judge said that that the Royal Bank of Scotland lacked “candour” in the proceedings, specifically in its deliberate failure to admit to key evidence in the Court of Session. In a debate in the House of Commons on March 10th, 2010 Carlye’s MP, Jim Hood (Labour, Lanark and Hamilton East) said: “If someone is described in a judge’s language as lacking candour, that might mean to some of us in the House that they were lying through their back teeth.”
No change in culture at RBS?
The 2013 Highland Financial Partners judgment, which followed the 2010 judicial comments in the Scottish Court of Sesssion in RBS v Carlyle, raised grave doubts about the culture of RBS and its approach to litigation. Both the recent order of Chief Master Marsh in Chaudhry and the recent judicial comments made by Asplin J in PAG [4] suggest that nothing has changed in the culture at RBS.
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FOOTNOTES:
[1] Mehnaaz Chaudhry & Another v. The Royal Bank of Scotland PLC (High Court of Justice, Chancery Division, Claim No: HC-2013-000489)
[2] The Royal Bank of Scotland Plc v. Highland Financial Partners LP [2013] EWCA Civ 328
[3] Royal Bank of Scotland Plc v Carlyle [2010] ScotCS CSOH_3 [4] Property Alliance Group Ltd v The Royal Bank of Scotland Plc [2015] EWHC 322 (Ch) (19 February 2015)