Real Risk of Foreign Prosecution, Not Regulatory Confidentiality Alone, Justifies Withholding Disclosure:
Commentary on Persons Identified in Schedule 1 to the Re‑Re‑Amended Particulars of Claim v Standard Chartered plc [2025] EWCA Civ 1581

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1. Introduction

This Court of Appeal decision arises from large‑scale investor litigation against Standard Chartered plc (“SC”) under sections 90 and 90A of the Financial Services and Markets Act 2000 (“FSMA”). The underlying claim concerns alleged misstatements and omissions in SC’s published information and prospectuses over more than a decade, connected to:

• US sanctions breaches leading to the 2012 and 2019 settlements with US authorities;
• alleged further misconduct contained in the “Brutus” qui tam complaints in the United States; and
• allegations of a bribery scheme involving Maxpower Group Pte Ltd.

The immediate issue before the Court of Appeal, however, is procedural: to what extent can a party to English litigation resist disclosure of relevant documents on the basis that:

• foreign law (here, US law) prohibits disclosure of those documents to third parties, and
• foreign financial regulators (the Federal Reserve Board (“FRB”), New York Department of Financial Services (“NYDFS”) and FinCEN) insist that the documents remain confidential?

SC sought to withhold from disclosure:

• “CSI Documents” – documents said to contain “Confidential Supervisory Information” (CSI) belonging to the FRB and NYDFS; and
• “US SAR Documents” – Suspicious Activity Reports (SARs) filed with FinCEN and documents that would reveal their existence or contents.

SC argued that disclosure would (or might) expose it to criminal prosecution and/or regulatory sanctions in the United States and, even absent such risk, that principles of comity and the public interest in maintaining regulatory confidentiality should persuade the English court to withhold disclosure.

Mr Justice Michael Green, the assigned trial judge in the FSMA claims, refused to make the withholding order, directing that the documents be disclosed into a confidentiality ring. SC appealed on three grounds:

1. the judge erred in finding no “real risk” of foreign prosecution or sanction;
2. the judge wrongly assessed the relevance and probative value of the documents; and
3. the judge misused his discretion by insufficiently weighting comity and regulatory confidentiality, particularly for the CSI Documents.

The Court of Appeal (Lewison, Snowden and Newey LJJ) dismissed the appeal in full. Though the underlying FSMA litigation settled after circulation of the draft judgment, the Court, applying Barclays Bank v Nylon Capital [2011] EWCA Civ 826, nonetheless handed down its judgment because of its wider importance.

This commentary examines:

• the structure and outcome of the judgment;
• its treatment of earlier authorities on foreign law, comity and disclosure (especially Bank Mellat, Abacha and Nassé);
• the Court’s articulation of the governing test – a “real or actual risk” of foreign prosecution or sanction – and its approach to foreign regulatory confidentiality; and
• its practical and doctrinal significance for future cross‑border financial, regulatory and securities litigation.

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2. Summary of the Judgment

2.1 Outcome

The appeal was dismissed. The Court of Appeal upheld:

• the judge’s finding that SC had failed to demonstrate any real or actual risk of prosecution or civil/regulatory sanction in the US arising from disclosure of:
  • the CSI Documents; and
  • the US SAR Documents, when disclosed pursuant to an English court order into a confidentiality ring.
• the judge’s conclusion that the documents were sufficiently relevant and potentially probative in the FSMA proceedings;
• the judge’s discretionary decision to order disclosure subject to a lawyers’ confidentiality ring.

2.2 Key holdings / principles

The Court of Appeal affirms and develops several important principles:

1. Default rule of disclosure and substantial burden on the withholding party. Disclosure of relevant documents is a foundational feature of English civil procedure. Any departure is exceptional; the party seeking to withhold bears a “substantial” burden of persuasion.
2. Foreign law and comity do not override English procedural rules. English courts apply the lex fori on procedural matters (including disclosure). Foreign laws that criminalise or prohibit disclosure are factors in the discretionary balance, but they do not oust the court’s jurisdiction or its ability to conduct proceedings under English rules.
3. “Real or actual risk” of prosecution or sanction is required. It is not enough to show that disclosure would technically contravene foreign law. The party resisting disclosure must show a real (i.e. actual, not merely theoretical or fanciful) risk of prosecution or sanction. This is an essentially factual inquiry, informed by foreign law evidence but ultimately for the English court.
4. Criminal versus civil/regulatory penalties. A potential criminal prosecution is a weighty factor, but even then, disclosure will “rarely” be withheld. Where the risk is only of civil or regulatory enforcement, that will generally carry less weight and in many cases can be addressed by confidentiality measures. Only “exceptional” cases will justify withholding merely on the basis of civil or regulatory risks.
5. No special or elevated weight for foreign regulatory confidentiality. Statutory confidentiality owed to foreign financial regulators (e.g. CSI rules) is a relevant consideration, but it:
   • does not enjoy an inherently higher status than private law confidentiality; and
   • does not, without more, justify withholding disclosure where there is no real risk of prosecution or serious sanction.
6. Confidentiality rings as primary mitigation tool. The Court emphasises the appropriateness of confidentiality rings as a means to:
   • accommodate foreign regulatory sensitivities; and
   • protect third‑party or supervisory confidentiality;
   while still facilitating the fair disposal of proceedings.
7. Limited role of Abacha in this context. Abacha concerned state‑to‑state mutual legal assistance and is aligned with general principles in Nassé. It does not support any notion that “regulatory” confidentiality, as such, is to be given special or decisive weight.
8. Appellate restraint on case‑management decisions. Consistent with Bank Mellat, appellate review of such disclosure/comity decisions is limited. The Court of Appeal will only interfere where the first‑instance judge has erred in law or principle or reached a clearly untenable conclusion.

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3. Background and Context

3.1 The underlying FSMA claims

The claim is a major piece of securities litigation:

• 216 claimants, representing approx. 1,410 funds;
• alleged losses of around £1.5 billion;
• claims under:
  • FSMA s.90 – liability for untrue or misleading statements or omissions in listing particulars/prospectuses;
  • FSMA s.90A and Sch. 10A – liability for misleading statements, dishonest omissions, or dishonest delay in a wide class of “published information.”
• Relevant period: published information from 2007 to 2019, and prospectuses for rights issues in 2008, 2010 and 2015.

The claimants rely on:

• findings made in the 2019 US and FCA settlements; and
• allegations advanced in the Brutus qui tam complaints, including alleged continued sanctions breaches and misleading of US regulators.

Central issues in the FSMA proceedings include:

• what SC and its “PDMRs” (persons discharging managerial responsibilities) knew about sanctions breaches and compliance failures;
• whether SC misled US authorities around the 2012 settlements (e.g. by downplaying post‑2007 Iranian transactions);
• how SC approached US regulators during the investigations leading to the 2019 settlements.

These questions make internal and regulatory communications – including CSI Documents and SAR‑related materials – potentially powerful evidence of:

• who knew what, and when; and
• how SC presented (or mis‑presented) its own conduct to regulators and the market.

3.2 The contested document categories

(a) CSI Documents

The “CSI Documents” comprised several sub‑categories:

1. FRB and NYDFS reports concerning SC’s New York branch (SCBNY) and associated correspondence;
2. SCBNY’s responses (including drafts) to those supervisory reports;
3. reports prepared by an NYDFS‑appointed “Monitor” responsible for overseeing SC’s remediation under the 2012 settlements, plus associated documents;
4. letters and correspondence between SCBNY and FRB, NYDFS and the Monitor, and presentations to those authorities;
5. internal SC/SCBNY/Bank documents referring to communications with the US regulators or Monitor; and
6. internal documents with high‑level or passing references to CSI.

Shortly before the first‑instance hearing, FRB and NYDFS consented to disclosure of sub‑categories (5) and (6), provided they were confined to a lawyers’ confidentiality ring. They refused consent for disclosure of (1)–(4).

(b) US SAR Documents

The US SAR Documents included:

• SARs filed by SCBNY with FinCEN, and
• communications or other materials which would tend to reveal the existence or contents of SARs (“SAR Information”).

US law (the Bank Secrecy Act and FinCEN regulations) strictly prohibits banks and their personnel from disclosing SARs or information revealing their existence, subject to narrow exceptions. SC contended that:

• unauthorised disclosure would be a federal offence; and
• it might also trigger civil enforcement by FinCEN or action by other US regulatory bodies.

Notably, some SARs had already been voluntarily shared by SC’s US lawyers with various US authorities in the course of the settlement process leading to the 2019 settlements, but no consent had been given to their use in foreign civil litigation.

(c) MAS Documents

A third category concerned documents subject to Singaporean confidentiality rules (the “MAS Documents”). By the time of the appeal, the Monetary Authority of Singapore no longer objected (subject to redactions), and nothing turned on these documents.

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4. Legal Framework and Key Authorities

4.1 Core English principles on disclosure and confidentiality

The Court reiterates three pillars of English civil procedure:

1. Disclosure as a default procedural rule (paras 71–72).
   Disclosure is essential to:
   • allow parties to obtain evidence that supports their own case or undermines the opponent’s;
   • ensure fairness through “cards on the table”; and
   • facilitate early settlement.
2. Limitations on disclosure:
   Mandatory limitations include:
   • legal professional privilege; and
   • public interest immunity.
   Discretionary limitations may arise from:
   • third‑party confidentiality; and
   • other exceptional case‑management considerations.
3. Third‑party confidentiality: Science Research Council v Nassé [1980] AC 1028 (paras 73–74).
   The House of Lords held that:
   • confidential documents are not immune from disclosure simply by reason of their confidentiality;
   • the court must consider whether disclosure is “necessary for disposing fairly of the proceedings”;
   • the court should usually inspect the documents; and
   • protective measures (e.g. confidentiality rings, coding, private hearings) should be used where appropriate to minimise harm.

4.2 Foreign law, comity and disclosure: Bank Mellat and Abacha

(a) National Crime Agency v Abacha [2016] EWCA Civ 760 (para 75–76, 128–129)

Abacha involved mutual legal assistance under a bilateral treaty between the UK and US. The US Department of Justice requested assistance for civil forfeiture proceedings; the UK courts made a prohibition order over assets in England. The defendants sought inspection of part of the US request.

The Court of Appeal held that:

• a party seeking assistance from the English court must generally accept English procedural rules;
• however, the particular US request enjoyed state‑to‑state confidentiality (protected under the treaty), so inspection was allowed for one aspect (to test whether the property was “identified”) but refused for the rest (on whether it was “relevant property”).

In the present case, SC sought to use Abacha to argue that obligations of confidence owed to foreign regulators under public law regimes (such as CSI rules) should be treated with special deference. The Court of Appeal rejected that extension: Abacha is about treaty‑based, inter‑governmental confidentiality and is consistent with the more general Nassé approach, not a separate category with special status.

(b) Bank Mellat v HM Treasury [2019] EWCA Civ 449 (paras 33, 77–83)

Bank Mellat concerned a claim for damages by an Iranian bank against HM Treasury following a “financial restriction order” later held unlawful. Disclosure issues arose over:

• documents containing confidential customer data; and
• a claimed risk of prosecution in foreign states (Turkey and Iran) if unredacted documents were disclosed.

Gross LJ summarised the applicable principles (quoted at para 80 of the present judgment). In essence:

1. The English court has jurisdiction to order inspection even if compliance may involve contravening foreign law, including foreign criminal law.
2. Disclosure and inspection are procedural matters governed by English law (lex fori); English litigation is to be “played” by English rules, not foreign ones.
3. The court will not lightly order a party to breach its “home” criminal law, especially bearing comity in mind, but it is not precluded from doing so.
4. The court must conduct a balancing exercise:
   • weighing the real (actual) risk of prosecution in the foreign state; against
   • the importance of the documents to the fair disposal of the English proceedings.
   The existence of a real risk is a factor, not a trump card.
5. If inspection is ordered, the court can mitigate foreign law concerns by confidentiality measures (e.g. confidentiality rings).
6. Comity is reciprocal: foreign states may reasonably be expected not to prosecute someone for complying with a court order from another country.

Gross LJ additionally stressed (para 70 of Bank Mellat, cited at para 81 here) that:

• the key question is the actual risk of prosecution, not merely that disclosure would breach foreign law; and
• the burden of proof lies on the resisting party; the court may use its own “intelligence and experience” in evaluating the evidence.

The present Court of Appeal judgment treats Bank Mellat as the controlling authority, applying and slightly refining its principles in the specific context of SAR secrecy and CSI.

4.3 First‑instance applications of Bank Mellat

The Court notes (para 34) a line of first‑instance cases applying Bank Mellat, including:

• Tugushev v Orlov [2021] EWHC 1514 (Comm);
• The Public Institution for Social Security v Al Wazzan [2023] EWHC 1065 (Comm);
• Joshua v Renault SA [2024] EWHC 1424 (KB); and
• NMC Health Plc (in administration) v EY LLP [2025] EWHC 1048 (Comm).

Those cases emphasise that:

• the burden is on the party resisting disclosure;
• the risk of prosecution must be “real”, “actual” or “not merely theoretical”;
• typically there are few, if any, examples where the court has declined disclosure on foreign law grounds.

Cockerill J in Joshua v Renault is especially cited for describing the need for a “real, rather than fanciful” risk, and for warning that the absence of previous prosecutions is a “highly pertinent” but not conclusive factor (para 96).

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5. The Court’s Legal Reasoning

5.1 Ground 1 – “Real risk” of foreign prosecution or sanctions

5.1.1 Alleged misdirection on the test

SC argued that the judge:

• wrongly suggested that only risks that were “more probable than not” (i.e. >50%) would count as “real”; and
• treated the absence of prior prosecutions as a threshold bar to any finding of real risk.

The Court of Appeal rejected both contentions:

• Although para 75 of the judgment, read in isolation, was “infelicitous” (para 93), when read as a whole the judge clearly applied the Bank Mellat test of “real or actual risk”. He repeatedly contrasted real vs theoretical risk, and adopted the language of “actual risk” from NMC and Joshua v Renault.
• On prosecutions, while the judge said at one point that “there needs to be actual evidence of prosecutions” (para 28), he immediately went on to treat:
  • the absence of prosecutions as a “highly pertinent” and “influential” factor, not a threshold requirement; and
  • considered explanations for that absence in the parties’ evidence.
  Read as a whole, he did not treat absence of prosecutions as determinative (paras 95–97).

The Court reinforced that:

• a “real risk” does not require proof on the balance of probabilities that a prosecution will happen; and
• actual prosecutions are strong evidence of such a risk, but the risk could, in principle, be established even before any first prosecution has occurred.

5.1.2 Criminal vs civil/regulatory sanctions

SC also contended that the judge wrongly “downgraded” civil/regulatory risks, suggesting that only criminal prosecution could justify withholding.

The Court accepted that some of the judge’s language (e.g. para 35) could be read as creating an unjustified hierarchy, but concluded that in context:

• the judge was making a commonsense point that “a lesser penalty” carries less weight in the balance (para 99);
• he did in fact conduct a distinct analysis of civil/regulatory risks in relation to CSI (paras 59–61), which he would not have done had he considered them irrelevant;
• he concluded that any such risk could be sufficiently mitigated by a confidentiality ring (para 101).

Thus the judge did not err in law or principle: he simply assessed the regulatory risk as low and sufficiently mitigated for these facts.

5.1.3 Evaluation of the US evidence – CSI and SAR Documents

(a) CSI (Confidential Supervisory Information)

By the time of the appeal, SC had abandoned any argument that there remained a real risk of prosecution in respect of the CSI Documents (excluding SARs). The Court accordingly focused on:

• the impact of potential regulatory action; and
• wider comity and public interest arguments (considered under Ground 3).

On the expert evidence about CSI (from Mr Bourtin and Ms Rimon), the judge had:

• noted that both experts agreed there were no known prosecutions in situations like this;
• accepted Ms Rimon’s view that the risk of prosecution was “remote” where disclosure was compelled by a foreign court order;
• criticised Mr Bourtin’s evidence as:
  • focusing on civil enforcement, not criminal prosecution;
  • not explicitly engaging with the fact that disclosure would occur under compulsion of an English court;
  • potentially coloured by his longstanding role as SC’s counsel, including in the underlying regulatory matters.

The Court of Appeal held that this evaluative assessment fell well within the proper remit of the trial judge and was adequately reasoned.

(b) US SAR Documents

The SAR materials raised sharper issues because:

• US law unequivocally prohibits their unauthorised disclosure;
• there have been prosecutions and civil penalties for unauthorised SAR disclosure (albeit modest and in different contexts);
• FinCEN places great weight on SAR secrecy.

SC relied on the expert evidence of Mr Das (former Acting Director of FinCEN). Mr Das:

• confirmed that unauthorised SAR disclosure is unlawful under US federal law;
• identified statutory maximum penalties (up to $100,000 per civil violation; $250,000 and up to five years’ imprisonment criminally);
• gave examples of individual prosecutions and civil actions where SARs were leaked or misused;
• stated he was:
  • unaware of any case where a foreign court had ordered SAR disclosure; and
  • unaware of any case where FinCEN had imposed penalties where the disclosure was under such a foreign court order.

The judge focused on the critical missing element: none of the experts, including Mr Das, actually opined on:

• the likelihood of FinCEN or US enforcement agencies taking action in this kind of scenario – i.e. where:
  • a bank had sought permission from the US regulators;
  • permission was refused;
  • the bank then opposed disclosure in the foreign court; but
  • ultimately complied, under compulsion, with a foreign court’s order, and only within a tight confidentiality ring.

Against that background, the Court of Appeal considered it entirely legitimate for the judge to use his “own intelligence and experience” to conclude that:

• the risk of prosecution or serious civil sanction was remote rather than “real” or “actual” (paras 108–110);
• several factors weighed against enforcement action:
  • the historic nature of the SARs (no ongoing examinations or risk of “tipping off” current suspects identified);
  • SC’s full cooperation with US regulators over many years;
  • SC’s attempts to avoid disclosure and to secure US regulator consent;
  • the fact that disclosure was not voluntary but compelled by a court of competent jurisdiction;
  • limitation of disclosure to a confidentiality ring, minimising any broader dissemination or harm to regulatory processes.

Taking these factors, and FinCEN’s own published enforcement factors, into account, the Court held there was “ample material” for the judge to conclude that any risk of prosecution or serious civil sanction was remote and did not cross the “real risk” threshold (para 110).

5.2 Ground 2 – Relevance and probative value of the documents

SC alleged that the judge:

• treated the balance as “heavily tilted” in favour of disclosure once relevance was established, contrary to Bank Mellat; and
• failed to conduct a nuanced assessment of the materiality of the documents, treating relevance as a binary on/off switch.

5.2.1 Default rule, burden and the “scale‑tilting” complaint

The Court clarified the correct conceptual framework:

• English civil procedure starts from a default rule of disclosure of relevant documents;
• this default reflects strong policy considerations (fairness, transparency, settlement – para 71);
• a party seeking to depart from that rule carries a substantial burden of persuasion (para 115);
• this is consistent with the statement in Matthews & Malek (approved in Bank Mellat and cited at para 79) that the court will “rarely” be persuaded not to order disclosure on foreign law grounds.

The Court accepted Lord Wilberforce’s caution in Nassé that “balancing” is a metaphor, not a precise formula; what is required is a judicial assessment of:

• the strength of the interest in preserving confidentiality and the harm from breach; and
• whether the aims of fair disposal can be achieved without disclosure, or with protective measures.

Against that background, the Court held that the judge:

• properly recognised that there is a starting bias in favour of disclosure, given the default rule; and
• did not thereby treat relevance alone as determinative or refuse to weigh other factors.

5.2.2 Assessment of significance of the documents

On substance, the judge had:

• expressly rejected SC’s characterisation of the CSI Documents and SAR Documents as only “tangentially” relevant;
• linked those documents to:
  • alleged group‑level sanctions misconduct;
  • oversight and compliance failures; and
  • what SC and its senior officers knew and disclosed – all central issues under FSMA s.90A and Sch. 10A (paras 43–47, 63–66).
• recognised that the claimants do not have access to the underlying evidence which lay behind the 2019 settlements and that the CSI and SAR materials could illuminate:
  • who within SC saw what regulatory communications; and
  • how SC responded to regulatory findings.

The Court of Appeal emphasised that:

• “relevance” is an evaluative concept; and
• it would “potentially be unfair” simply to accept one party’s assertion (based on its own review) that documents are of only peripheral value, especially where the court itself cannot inspect them (para 42).

It concluded that:

• the judge did, in fact, assess the likely probative value of the documents;
• his view – that they may be “highly relevant” to PDMR knowledge and oversight – was plainly tenable; and
• SC had not demonstrated any error of law or principle, nor that the judge’s evaluation was “wholly untenable” (para 118–119).

5.3 Ground 3 – Regulatory confidentiality, comity and the CSI Documents

Ground 3 focused on the CSI Documents (excluding SARs) and raised two main arguments:

1. That the judge wrongly “pre‑tilted” the scales towards disclosure (already addressed above); and
2. That, even absent a real risk of criminal or regulatory action, the public interest in maintaining confidentiality of communications between banks and foreign regulators should itself justify a withholding order, on comity grounds.

5.3.1 No special status for regulatory confidentiality

SC argued that:

• statutory confidentiality owed to financial regulators (e.g. FRB/NYDFS CSI) promotes candid supervision and thus the stability of the financial system;
• such confidentiality ought therefore to be given heightened weight compared with ordinary private law confidentiality; and
• Abacha supports this approach because it involved respect for confidentiality asserted by a foreign governmental body.

The Court firmly rejected this:

• Abacha is distinguishable: it concerned state‑to‑state, treaty‑based confidentiality in mutual legal assistance requests, not routine regulatory communications between a private bank and regulators (paras 75–76, 128–129).
• The general rule from Nassé applies: third‑party confidentiality may justify withholding, but each case depends on the nature of the confidentiality and the necessity of disclosure for fair disposal.
• There is no principled reason why “regulatory” confidentiality must inherently be weighted more heavily than private law or other statutory confidentiality (para 129).
• Some private law or non‑regulatory statutory duties of confidence can be of very high importance; there is no automatic hierarchy.

5.3.2 Comity and the regulators’ stance

The Court accepted, as Bank Mellat emphasised, that:

• English courts should not “lightly” require a party to contravene foreign law, especially where foreign criminal sanctions are in play; and
• comity “cuts both ways”: foreign regulators can reasonably be expected to recognise that the English court must apply its own procedural law and may seize upon confidentiality rings and other protections as sufficient.

However, several features undercut SC’s comity argument:

• The FRB/NYDFS letters:
  • expressed a generic concern about preserving candid supervisory communications; but
  • were grounded heavily in their own relevance assessment – they considered that sub‑categories (5)–(6) were more likely to contain information relevant to the issues in the UK proceedings.
• The regulators:
  • did not intervene in the English proceedings;
  • did not produce evidence targeted to the specific documents or explaining why disclosure within a confidentiality ring would materially harm their functions;
  • demonstrated a nuanced approach themselves by permitting disclosure of some CSI‑related material (sub‑categories (5)–(6)).
  This undermined the claim that any disclosure at all would seriously prejudice US regulatory interests (para 131).
• The English court could not itself inspect the documents because SC said it could not disclose them even to the court. This practical constraint – not attributable to the claimants – made SC’s burden harder: it was asking the court to trust its own relevance and sensitivity assessment without independent verification (para 132).

The judge addressed the comity and public interest arguments explicitly (paras 38–41). He ultimately concluded that:

• the relevance and potential materiality of the CSI Documents were significant, and
• a lawyers’ confidentiality ring provided “sufficient protection” for the regulators.

The Court of Appeal found that conclusion rational and fully consistent with Nassé and Bank Mellat.

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6. Complex Concepts Explained

6.1 Sections 90 and 90A FSMA and PDMRs

• FSMA s.90 – deals with liability for untrue or misleading statements or omissions in listing particulars, including prospectuses. Investors who acquired securities and suffered loss because of such defects may claim compensation from those “responsible” for the particulars, subject to statutory defences.
• FSMA s.90A and Schedule 10A – extend liability to a broader category of “published information” (e.g. annual and half‑year reports). To succeed, claimants generally must show that:
  • a statement was misleading, or there was a dishonest omission or dishonest delay; and
  • a “PDMR” (person discharging managerial responsibilities) had relevant knowledge or acted dishonestly.
• PDMR – typically senior individuals within the issuer (directors, senior managers) who make or oversee disclosures. Their knowledge and state of mind are central under s.90A, which is why documents about regulatory communications and internal oversight are so significant.

6.2 Confidential Supervisory Information (CSI)

CSI is a US regulatory concept: information produced by or for prudential regulators such as FRB or NYDFS in the course of their supervisory functions. Under US law:

• CSI is considered the property of the relevant regulator;
• banks may not disclose CSI without the regulator’s consent;
• breach may lead to criminal penalties (in some formulations) and/or regulatory enforcement.

In practice, CSI includes examination reports, supervisory correspondence and Monitor reports.

6.3 Suspicious Activity Reports (SARs)

Under the US Bank Secrecy Act:

• financial institutions must report suspicious transactions through SARs to FinCEN;
• they must keep SARs and their existence strictly confidential – disclosure to the subject of the SAR or to most third parties is prohibited;
• unauthorised SAR disclosure can attract criminal and civil sanctions.

SAR secrecy is seen as a cornerstone of US anti‑money‑laundering enforcement because:

• it protects whistleblowing and reporting processes;
• it avoids “tipping off” suspected criminals that they are under investigation.

The novelty in this case lay in considering SAR disclosure mandated by a foreign (English) court in civil proceedings, which the evidence suggested had never previously occurred.

6.4 Confidentiality rings

A confidentiality ring is a court‑ordered mechanism whereby:

• certain sensitive documents are disclosed only to a defined category of individuals (e.g. external lawyers, possibly experts and sometimes specified client representatives);
• those individuals give undertakings not to disclose or use the information outside the litigation;
• the documents may be restricted from being referred to in open court or in publicly available pleadings or submissions.

Confidentiality rings are recognised as an “exceptional derogation from open justice” (para 93), used to reconcile:

• the need for disclosure for fair adjudication; and
• legitimate interests in preserving confidentiality (commercial, regulatory, diplomatic, etc.).

6.5 Comity

“Comity” is the principle that:

• courts in one state should show respect and deference, within limits, to the sovereignty and laws of other states;
• they should avoid unnecessary conflict, particularly where another state’s public authorities or legal regimes are engaged.

In this context, comity means:

• English courts should be cautious about requiring acts that contravene foreign law;
• but foreign states and regulators are likewise expected to respect that English courts must apply English procedural law; and
• if an English court, after careful balancing, orders disclosure with appropriate protections, foreign authorities should, in turn, be reluctant to prosecute or penalise compliance with that order (Bank Mellat, para 63(vi)).

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7. Impact and Significance

7.1 For cross‑border financial and securities litigation

This judgment has immediate consequences for banks and listed issuers involved in cross‑border investigations and litigation:

• Regulatory confidentiality is not a shield to English disclosure.
  Banks cannot assume that obligations under US (or other foreign) regimes such as CSI or SAR secrecy will immunise relevant documents from disclosure in English proceedings.
• Real risk, not theoretical breach.
  Parties must produce robust, case‑specific evidence that there is:
  • a real (not remote) risk of prosecution or serious sanction; and
  • that confidentiality measures (e.g. confidentiality rings) would not adequately mitigate that risk.
• Confidentiality rings will frequently be the solution.
  For many categories of foreign regulatory material, the Court signals that disclosure into a confidentiality ring is likely to be the appropriate compromise, preserving:
  • the integrity of English litigation; and
  • reasonable deference to foreign regulatory interests.

7.2 For engagement with foreign regulators

Regulated entities will likely need to recalibrate their approach:

• Early dialogue. When UK litigation is foreseeable, entities should engage with foreign regulators early, explaining the likelihood of judicially compelled disclosure and exploring tailored consent or protective measures.
• Realistic advice to regulators. Representations to regulators that certain documents are irrelevant to foreign litigation (a key premise of the FRB/NYDFS letters) may be scrutinised in English courts if later deployed in support of a withholding application.
• Internal record‑keeping. Institutions may wish to document the steps they take to resist disclosure and to protect regulatory concerns, as these may be relevant mitigating factors if foreign enforcement action is ever in question.

7.3 For claimants in FSMA and other complex civil actions

From a claimant perspective, the judgment:

• strengthens access to regulatory and compliance‑related evidence – often critical to establishing knowledge, recklessness or dishonesty in misstatement claims;
• confirms that UK courts will not lightly allow defendants to “ring‑fence” regulatory communications;
• encourages proactive use of targeted disclosure requests for supervisory and SAR‑related material, backed by the approach taken here.

7.4 Doctrinal consolidation

At a doctrinal level, the judgment:

• consolidates Bank Mellat as the leading authority on foreign criminal law and disclosure;
• clarifies that:
  • “real or actual risk” does not require proof on the balance of probabilities;
  • the absence of prior prosecutions is highly relevant but not conclusive; and
  • civil/regulatory risks carry lesser weight than criminal penalties, though they can be relevant in exceptional cases.
• rejects any move towards a distinct, more protective category of “regulatory” confidentiality;
• reaffirms the strong starting presumption in favour of disclosure, subject to carefully tailored protective mechanisms.

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8. Conclusion

The Court of Appeal’s decision in Persons Identified in Schedule 1 to the RRAPC v Standard Chartered plc [2025] EWCA Civ 1581 is an important restatement and refinement of the law on foreign law constraints, comity, and disclosure in English civil proceedings.

The central message is clear:

• English courts will apply their own procedural law, with disclosure of relevant documents as the default;
• foreign laws that prohibit disclosure, even where backed by criminal or regulatory sanctions, are serious considerations but not trump cards;
• the decisive threshold is whether there is a real or actual risk of prosecution or significant sanction – mere breach in abstracto is not enough;
• civil and regulatory risks are generally of lesser weight than criminal risk and must be exceptional to justify withholding;
• foreign regulatory confidentiality (CSI, SAR secrecy) does not receive special or elevated treatment as compared with other forms of confidentiality;
• confidentiality rings are the preferred judicial tool to reconcile fairness in litigation with legitimate regulatory sensitivities.

In rejecting SC’s attempt to withhold disclosure of CSI and SAR materials, the Court signals that large, internationally regulated financial institutions cannot place their regulatory communications and suspicious activity reporting beyond the reach of English civil justice by invoking foreign secrecy laws alone.

For future cross‑border financial and securities litigation – and particularly for complex FSMA s.90/s.90A claims – this judgment will be a key authority guiding courts, litigants, and regulators in navigating the difficult terrain between transparency in litigation and confidentiality in supervision.