The maintenance of a robust and effective legal system depends, in a large part, on litigants being completely open and forthright with their legal advisors without fear of sensitive information falling into the hands of opponents. This is rationale offered for the existence of what is known as litigation privilege. It maintains that communications passing between a litigant and their lawyers are effectively ‘carved out’ of the overarching obligation to disclose all of the documents in their possession that are relevant to a fact that is in issue in the litigation.
However, the exception does not allow a party to completely conceal documents that are the subject of the privilege. In all jurisdictions, parties are required to identify them by a brief description and date and then openly claim that the document is privileged so that the other party has the opportunity to object and seek the intervention of the Court if it sees fit.
Privilege extends to more than just documents, however in the case of documents it is considered privileged if it was prepared for the dominant purpose of instructing a lawyer to prosecute or defend proceedings and extends to proceedings that are contemplated but not yet in existence.
The paradigm is certainly not as neat as it used to be with the increasing number of insurance cases where the defendant has subrogated its rights to an insurer, investigators and claims managers are employed and experts are briefed to give opinions on the subject matter of disputes.
This complexity was brought to light just recently in the Western Australian Supreme Court where an individual land owner sued Albany council for damage caused by flooding to her property. What was in issue was certain documents that the council refused to allow inspection of on the basis that they were privileged. The documents fell into three categories:
- Documents the council used to notify its insurer of the claim;
- Documents passing between the council, the insurer and an investigator hired to investigate the facts claimed; and
- Correspondence between the council, the insurer and the investigator regarding what information will be included in a brief to the council’s solicitors.
The Court construed the rules about privilege narrowly and applied it only to documents that were presented or intended to be presented to the council’s solicitors. Documents passing between the insurer, the council and the investigator discussing only facts and initial assessments were not the subject of privilege because no determination had been made, at that point, to place them before the solicitors for advice.
Documents from categories 1 and 2 were ordered to be produced for inspection and category 3 documents were held to be privileged.
It is natural to be somewhat sceptical when a party refuses to disclose certain documents and there has been occasion when a party has been compelled to disclose documents the litigation ends abruptly. However, the reasons for maintaining privilege can be many and can even include matters not related to the litigation and the protection of the interests of parties that are not involved.
There has been a consistent and well developed line of authority in Australia in relation to litigation privilege and the above is evidence that it is being applied continuously. The case further serves as a reminder that claims of privilege must be premised on an unequivocal character of communications that have at their heart the dominant purpose of engaging or continuing the engagement of a lawyer in the prosecution or defence of a current or pending matter.