From MATS 1, Section 1, Chapter 3 - Separation Standards:
Standard vertical or horizontal separation shall be provided between:
.......
(h) Aircraft participating in the radar advisory service.
From MATS 1, Section 1, Chapter 5 - Radar Services:
A radar advisory service (RAS) is an air traffic radar service in which ....... maintain prescribed separation between aircraft participating in the advisory service, and in which he shall pass to the pilot the bearing, distance and, if known, level of conflicting non-participating traffic, together with advice on action necessary to avoid the confliction. Where time does not permit ...... controller shall pass advice on avoiding action....
Under a RAS the following conditions appply:
.......
(e) Controllers shall pass avoiding action instructions to resolve a confliction with non-participating traffic and, wherever possible shall seek to achieve .... 5nm/3000'....... however, it is recognised that in the event of the sudden appearance of unknown traffic, and when unknown aircraft make unpredictable changes in flight path, it is not always possible to achieve these minima.
(end of text)
It seems pretty obvious to me that 'I didn't see it' or 'I was too busy with my airways traffic' are not valid reasons for, at the very least, giving avoiding action, so the decision not to provide RAS (or to limit it) is entirely justified in that respect. In my opinion though, that should be a judgement for the individual atco and not the company lawyers. It also seems very obvious that pilots should not expect to achieve standard separation in areas where military jets are involved in high energy manoeuvres, and in class G must be prepared to work that bit harder on their lookout. To be fair, most of them seem to understand this. Complaining about avoiding action turns or stopping climb and descent does not endear them to this controller though.