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04
Dec 2017

Legal Professional Privilege

What is Legal Professional Privilege?

Legal professional privilege (LPP) is a well-established legal principle that protects certain confidential communications between lawyers and their clients from being disclosed to a third party.

LPP was described by McHugh J in Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 550, as follows:

“Legal professional privilege is the shorthand description for the doctrine that prevents the disclosure of confidential communications between a lawyer and client, confidential communications between a lawyer and third parties when they are made for the benefit of a client, and confidential material that records the work of a lawyer carried out for the benefit of a client unless the client has consented to the disclosure. To be protected by the privilege, a communication must be made solely for the purpose of contemplated or pending litigation or for the obtaining or giving of legal advice.”

The rationale underpinning LPP is that it plays a role in the development of trust and candour in the lawyer/client relationship. In other words, the ‘layman’ should be able to seek assistance from the legal profession, free from fear of their communications being disclosed to a third party to their detriment.[1]

Key elements required for LPP

To establish LPP, the following three elements must be satisfied:

  • the communication and / or document (these terms will be used interchangeably throughout the article) must pass between the client and the client’s lawyer;
  • the communication must be made for the ‘dominant purpose’ of enabling the client to obtain legal advice (advice privilege) or for the purpose of actual or contemplated litigation (litigation privilege); and
  • the communication must be confidential.

If the elements are present, LLP attaches to the material. If they consent, there is no LPP.  Simply putting “Without Prejudice” at the start of a letter does not make the content subject to LPP.

‘Dominant Purpose’

The critical question of fact which will determine whether LPP attaches to a particular communication is what the “dominant purpose” is for that communication. Essentially what is being asked is, “What is the reason for that document or communication being brought into existence?”

The test to be applied by the court in this regard is objective. The fact that a document is created by a lawyer and subsequently provided to their client does not determine the purpose for which it was created. Rather, the court will consider the dominant purpose for the creation.

 How to make a claim for LPP

Should a court order the production of documents (by subpoena or otherwise), the order must be obeyed and documents which fall within the scope of the order produced.  Prior to production however, an objection may be made to producing any documents that attract LPP.  It is important that such an objection is made and a claim of privilege asserted over the documents at the first stage of the process as the ‘privilege’ is a privilege from producing to the court.[2]

As to how to actually make a claim for privilege from production, the common law position is clear: it is not sufficient to simply assert a claim for privilege. [3]

The party claiming privilege bears the onus of providing evidence to support its claim[4] and must do so with ‘sworn, direct evidence’.  This issue was recently considered in the case of Hancock v Rinehart (Privilege) [2016] NSWSC 12 where Brereton J states at paragraph [27]:

“… the grounds of the objection must be stated on oath, so that the court can determine their sufficiency: as already mentioned, the claimant must, by admissible direct evidence, set out the facts from which the court can see that the assertion is rightly made.”

The crucial point to remember is that the privilege is a privilege from production to the court. Producing documents in a packet marked “privilege” will do little to protect those documents from disclosure and, in some circumstances, may amount to a waiver of LPP unless a claim for privilege is actually made.

Waiver of Privilege

Waiver occurs where there has been an express or implied abandonment of the confidentiality of the document or communication.  If this occurs, a party consequently waives their right to claim LPP. Essentially, courts have held that where a party’s conduct is inconsistent with maintaining LPP and confidentiality no longer subsists the privilege attaching to the relevant communication is effectively lost.[5]

By way of example, LPP may be waived by:

  • providing privileged communications to another party (e.g. copying and forwarding emails);
  • reading out a privileged communication in open court;
  • where the content of the confidential communication is put in issue in the proceeding by the party entitled to the privilege, either by including reference to it in a court document, or tendering it in court; or
  • making a public reference (say in a letter, or in discussions with the media) to the legal advice.

The distinction between the legislative and the common law approach to the waiver of privilege is relatively minor. The legislative approach focuses on whether the client or party has ‘knowingly and voluntarily disclosed’ the substance of the evidence.[6] In contrast, the common law approach focuses on whether the party is acting inconsistently in asserting privilege. In any event, the High Court has made it clear that courts will “impute an intention where the actions of a party are plainly inconsistent with the maintenance of the confidentiality which the privilege is intended to protect”.[7]

Expert Reports

Whilst there are many ways in which a waiver of privilege can occur, one common way is in the context of expert reports. It is relatively common for lawyers to assist experts to amend their reports to ensure they are in admissible form, or for lawyers to provide to the expert communications which may be privileged to assist in the content of the report. Doing either of these is fraught with danger.

The crucial test is set out in New Cap Insurance Corporation Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 Justice White states at paragraph [53] that:

“The question is not merely whether it could be said that the privileged materials were used in such a way that they could be said to influence the content of the report, but whether it could be said that they influenced the content of the report in such a way that the use or service of the report would be inconsistent with maintaining the privilege in those materials, such as, where it would be unfair for the party to rely on the report without disclosure of those materials.”

Lawyers should always keep in mind that expert reports are required to state what material is relied upon in making the report. If the expert’s report cannot be understood without reference to the underpinning material, and that material attracts LPP, then there is a risk the LPP of a document / communication could be waived. Consequently, extreme caution must be exercised when communicating with experts or providing documents to assist in the preparation so that those communications and / or documents which would ordinarily attract LPP are not waived.

Key Takeaways

The key takeaways from this article for lawyers and ‘layman’ alike are as follows:

  1. Take notice of the subject line at the top of communications as they can identify a clear purpose for which a document is created. This may go a long way in establishing whether that document is for the ‘dominant purpose’ of providing legal advice;
  1. Confidentiality between the client and their legal adviser is paramount and should be protected at all times. A privileged document may be disclosed inadvertently through the course of discovery and depending on the character of the document, the confidential information may never regain its confidential nature; and
  1. Be wary of the privileged communications and documents being sent between legal advisers and experts as disclosure of those documents may result in privilege being lost.

[1] Attorney General (N.T.) v Maurice (1986) 61 ALJR 92 at 97 per Deane J.

[2] Hancock v Rinehart (Privilege) [2016] NSWSC 12.

[3] Kennedy v Wallace [2004] FCAFC 337 at [157]-[159] at [13] per Black CJ and Emmett J.

[4] Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at 337.

[5] Ampolex Ltd v Perpetual Trustee Company (Canberra) Ltd (1996) 70 ALJR 603 at 606.

[6] Evidence Act 1995 (Cth) s 122.

[7] Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 at 315 paragraph [30].