Legal professional privilege in Australia

Legal professional privilege has been described as an "important common law right" that is enforceable in equity.[5] The Evidence Acts do not expressly alter the common law privilege.[5]

The common law maintains a distinction between two limbs of legal professional privilege. Advice privilege refers to the protection of communications between a client and a lawyer for the purposes of the lawyer providing legal advice to the client. Litigation privilege refers to the protection of communications between a client, lawyer (and any third party) for the dominant purpose of anticipated or existing legal proceedings. The prior test of 'sole purpose,' as per Grant v Downs,[6] limited a lawyer's ability to claim privilege on items that were not for the exclusive purpose of the client's case. The current dominant purpose test, while more complex, significantly broadens the scope of legal professional privilege, as defined in Esso Australia Resources Ltd v Commissioner of Taxation.[7] There is, invariably, much overlap between the two limbs.[8]

Sections 118 and 119 of the 'Evidence Act 1995' (Cth) provide that confidential communications created for the dominant purpose[9] of providing legal advice or litigation are protected from disclosure to federal courts. Similar or identical provisions have been adopted in New South Wales[10] and Tasmania.[11] Legal professional privilege in the context of court proceedings is governed by the common law in the remaining Australian states.

The privilege protects two kinds of confidential communications between a client and his or her lawyer. The first kind is where the communications are confidential and made for the purposes of seeking or being provided with legal advice. The second kind is where the communications are made for the purpose of existing or reasonably contemplated judicial or quasi-judicial proceedings.[12] These two limbs of the privilege are called the advice privilege and the litigation privilege.[13]

Legal professional privilege is not absolute and it does not attach to a communication indefinitely. The privilege may be waived by the client, but not by the lawyer. Accordingly, a client's intentional or inadvertent actions in relation to their use of legal advice may preclude the client from asserting the privilege in future.

The High Court in Mann v Carnell[14] established a test of 'inconsistency' to determine whether a client has waived legal professional privilege over a communication. That is, a client will have waived privilege where their conduct has been inconsistent with the maintenance of that privilege. The most common circumstance in which a client will be found to have waived a privilege include disclosing the full advice, or the conclusions, gist or substance of the advice, to a third party or the public at large. This raises particular problems for public figures seeking to justify a particular course of action by relying on legal advice. However, privilege is not waived if a disclosure of a communication was made under a "compulsion of law".[15] An implied waiver of privilege can only occur when there is a voluntary disclosure of communication.[16]

One of the most unsettled areas of privilege law in Australia is the extent to which advice provided by in-house counsel is protected. In Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts (No. 2),[17] Justice Graham of the Federal Court of Australia refused a claim for privilege over advice provided by in-house counsel of Telstra, holding 'an in-house lawyer will lack the requisite measure of independence if his or her advice is at risk of being compromised by virtue of the nature of his employment relationship with his employer'. This created concerns in the legal community as to the extent that in-house legal advice is protected from disclosure to a court.[18] Justice Graham did not set out any measures or criteria for determining when an in-house lawyer is sufficiently independent of his or her employer.

In Vance v Air Marshall McCormack,[19] Justice Crispin of the Supreme Court of the Australian Capital Territory held that privilege only attached to advice provided by lawyers who had a right to practice. This judgment has substantial ramifications for in-house counsel who are not admitted solicitors.

Notwithstanding the above, there is no appellate authority on the extent to which legal professional privilege applies to advice provided by in-house counsel.

There is conflicting authority on whether legal professional privilege applies to communications prepared for the purpose of non-judicial legal proceedings, such as in administrative tribunals or commissions of enquiry. These conflicts have generally not reached appellate level.

In Ingot Capital Investments v Macquarie Equity Capital Markets,[20] Justice Bergin of the Supreme Court of New South Wales held that privilege did not apply to proceedings in the Administrative Appeals Tribunal. Justice Bergin's reasoning was that the AAT was not a court and stood outside the adversarial system of justice as an inquisitorial administrative body not bound by the rules of evidence.

The AAT itself departed from and strongly criticised Ingot in a decision handed down by Justice Downes in his capacity as President of the AAT. In Farnaby and Military Rehabilitation and Compensation Commission,[21] Justice Downes held that the litigation limb of the privilege applied to AAT proceedings and took the step of directing all future claims for privilege in the AAT to be handled accordingly.

The ALRC recommends extending legal professional privilege to non-judicial proceedings.[22]

On 29 November 2006, Attorney-General Philip Ruddock asked the ALRC to inquire into legal professional privilege in the context of coercive information-gathering powers held by Commonwealth agencies. A Discussion Paper was released by the ALRC on 26 September 2007, noting the need for a clear and consistent approach to legal professional privilege in Australia and its states and territories.[23]

In April 2011, Assistant Treasurer Bill Shorten announced a consultation on extending privilege to accountants providing tax advice, like their American counterparts.[24]

• Anderson, Jill; Williams, Neil; Clegg, Lorraine (2009). The new law of evidence:annotation and commentary on the uniform evidence acts (2nd ed.). Chatswood, NSW: LexisNexis. ISBN 978-0-409-32343-6. OCLC 457181042.
• Desiatnik, R. J. (1999). Legal professional privilege in Australia. Sydney: Prospect Media. ISBN 1-86316-146-5.