Primary Group (UK) Limited & Others v Royal Bank of Scotland Plc & Another  EWHC 1082 (Ch)
Primary Group Limited (Primary) entered into a loan facility ("the Agreement") with the Royal Bank of Scotland (RBS) in 2006. During initial discussions Primary expressed concern about potential conflicts arising from RBS's relationship with Direct Line Insurance Group plc (Direct Line). At the relevant time Direct Line was a subsidiary of RBS and a direct competitor of GBI (Holdings) Limited (trading as Swiftcover), one of Primary's subsidiaries. Primary contend that RBS gave them various assurances that all information provided to RBS would be kept confidential and not passed on to Direct Line. Additionally the Agreement imposed confidentiality obligations on RBS restricting how information provided to it by Primary could be used.
Primary defaulted on its obligations under the Agreement. RBS consequently instructed KPMG to conduct an independent business review of Primary, known as the "Medway Reports". RBS also consulted with Direct Line, which involved disclosing parts of the Medway Reports to Direct Line without first obtaining the permission of Primary.
Primary brought a claim against RBS for breach of a contractual obligation of confidence and against Direct Line for breach of an equitable obligation of confidence. RBS denied committing any breach of its contractual obligations and, in the alternative, argued that any such breach gave rise only to nominal damages.
Mr Justice Arnold readily found that RBS had given Primary assurances of confidentially. He noted that terms may be incorporated into a contract through written and oral agreements, and also through conduct. In addition, he considered that it is "common ground that a banker owes his customer a duty of confidentiality". Further he thought that, viewed as whole, the Medway Reports contained information which was confidential to Primary. Consequently he held that RBS was in breach of its contractual obligations.