The Court of Appeal’s judgement in Various Claimants v. Standard Chartered plc[1] is a significant decision on whether an English court may compel disclosure of documents that are confidential under foreign regulatory regimes – here, US suspicious activity reports (SARs) and confidential supervisory information (CSI) – and how the court balances comity, the risk of foreign sanctions and the fair disposal of English proceedings.
Background
The claim was brought by 216 claimants said to represent about 1,410 funds, all investors in Standard Chartered, seeking around £1.5 billion in damages under sections 90 and 90A of the Financial Services and Markets Act 2000 (FSMA). The claims were based on alleged misstatements and omissions in Standard Chartered’s published information between 2007 and 2019.
In 2012 and 2019, Standard Chartered entered into settlements with US authorities admitting to sanctions violations and anti-money laundering systems and controls failings. Alongside those, a whistleblower, pursued claims (ultimately dismissed) alleging that Standard Chartered concealed post-2007 Iran sanctions breaches.
The claimants, relying in part on the conduct addressed in the Settlements and on allegations in the Brutus complaint, asserted that Standard Chartered’s disclosures were misleading or incomplete and that persons discharging managerial responsibilities (PDMR) knowledge was engaged for liability under section 90A.
Against that backdrop, Standard Chartered made an application to withhold approximately 250 documents on grounds of foreign regulatory confidentiality and risk of prosecution or sanction in the US. The documents in issue comprised two categories:
- US SAR documents (the reports themselves and information revealing their existence) subject to the US Bank Secrecy Act and Financial Crimes Enforcement Network regulations.
- CSI documents, over which the Federal Reserve Bank and the New York State Department of Financial Services claim property and confidentiality restrictions, save where regulators authorise disclosure.
Standard Chartered confirmed that the US regulators had refused consent for the SARs and for most CSI communications to be disclosed.
The High Court’s decision
Mr Justice Michael Green dismissed Standard Chartered’s application to withhold disclosure of the US SAR and CSI materials, ordering disclosure into a confidentiality ring. He applied the principles in Bank Mellat v. HM Treasury[2] and related authorities, focusing on whether there was a ‘real’ or ‘actual’ risk of prosecution or sanction under foreign law and, if so, balancing that risk against the documents’ importance to the fair disposal of the English proceedings.
On the CSI (non?SAR) materials, the judge rejected Standard Chartered’s assessment that communications with US regulators were only tangentially relevant. He emphasised their potential to illuminate oversight, compliance and PDMR knowledge in relation to the misconduct underpinning the Settlements and the alleged misstatements/omissions, especially where the claimants lacked underlying evidence beyond public settlement findings. He found that a confidentiality ring would adequately protect comity and regulatory sensitivities.
On risk, the judge found that Standard Chartered had ‘got nowhere near’ demonstrating a real risk of US criminal prosecution for disclosing CSI under an English court order. He preferred the claimants’ expert’s evidence that the prospect was remote, noting the absence of prosecutions in analogous circumstances. He reached a similar conclusion regarding civil/regulatory action, considering that any penalties were likely to be small, particularly given compelled disclosure and protective measures.
For US SARs, the judge accepted that US law prohibits unauthorised disclosure and provides for civil/criminal penalties. However, he noted that Standard Chartered’s expert had not assessed the risk of sanction in the specific scenario of compliance with a foreign court’s order, and there were no examples of penalties in that fact pattern. He again ordered disclosure into a confidentiality ring.
The Court of Appeal’s decision
The Court of Appeal (Miles LJ, with Snowden LJ and Newey LJ agreeing) dismissed Standard Chartered’s appeal on all grounds, endorsing the High Court’s application of Bank Mellat and its evaluative conclusions.
First, as to the applicable legal framework, the Court of Appeal reiterated that disclosure is a core feature of the English procedural code, controlled by relevance and proportionality. Confidentiality is a factor, not a bar, and the court may adopt safeguards, such as confidentiality rings, to protect third-party interests. It emphasised that procedural orders for production and inspection are governed by English law, and that the court must balance any real foreign prosecution risk against the importance of the documents to the fair disposal of the case, acknowledging that comity cuts both ways.
As to the risk of prosecution for disclosure of US SARs, the Court of Appeal rejected the contention that the judge set an unduly high threshold. It read the judgement as applying the correct test of a real or actual risk rather than ‘more probable than not’. The court also rejected the suggestion that the judge treated evidence of prior prosecutions as a threshold requirement, noting that he properly treated the absence of prosecutions as a pertinent factor while analysing the expert evidence in full.
Evaluating the risk associated with US SARs, the Court of Appeal accepted that there was no direct evidence assessing the likelihood of sanctions where disclosure is compelled by an English court and confined to a confidentiality ring. It was entitled to use ‘its own intelligence’ per Bank Mellat. Given mitigation factors – including historic SARs, cooperation with regulators, lack of ongoing investigations evidenced, compelled disclosure and protective measures – the court held that the judge’s conclusion that any prosecution/sanction risk was remote was rationally supportable.
As to the materiality of the documents to the litigation, the Court of Appeal confirmed that the judge did not adopt a simplistic ‘relevance-only’ test or irrebuttable tilt. Rather, he recognised the default of disclosure, the burden on the withholding party, and undertook the required assessment of the SARs’ potential significance to PDMR knowledge and the pleaded case. His conclusion that the documents could be highly relevant was not irrational.
As to the CSI (non?SAR) documents and issues regarding comity, the Court of Appeal rejected the submission that regulatory confidentiality owed to foreign regulators should, as a category, be accorded special or enhanced weight beyond other serious confidentiality interests. While the court confirmed comity remains relevant, it emphasised that it ‘cuts both ways’, and that an English court is entitled to expect foreign authorities to respect English procedural orders, especially where protections are in place. In circumstances where the US regulators did not intervene and had themselves authorised certain disclosures into a confidentiality ring based on relevance, the judge’s conclusion that a confidentiality ring adequately protected regulatory interests was sound.
Accordingly, the appeal was dismissed.
Key takeaways
The English court will apply its own procedural law and default to disclosure, even where foreign criminal or regulatory laws restrict disclosure, but will carefully balance any demonstrated real or actual risk of foreign prosecution/sanction against the importance of the documents. Protective measures such as confidentiality rings are central tools in striking that balance.
A party seeking to withhold documents bears a substantial burden. It must produce concrete, case-specific evidence of a real risk of prosecution or sanction under foreign law in the actual circumstances (e.g., compelled disclosure into a confidentiality ring), not merely show that the foreign law prohibits disclosure in the abstract. Absence of analogous prosecutions is not determinative, but it is a highly pertinent factor.
Expert evidence must squarely address the precise risk question the court must decide: the likelihood of enforcement in the factual setting of compelled foreign disclosure with safeguards and the mitigating factors regulators actually weigh. General propositions about prohibitions or maximum penalties will not suffice.
For practitioners conducting complex securities and FSMA litigation, early identification of foreign?regulated materials, proactive engagement with regulators and designing robust confidentiality regimes are critical to managing comity concerns while ensuring access to potentially important evidence.
[1] [2025] EWCA Civ 1581
[2] [2019] EWCA Civ 449
Contributors
Alex Radcliffe