Pro­tect­ing In-house Coun­sel’s advice

In brief

Swaab believe the recent case of Hol­man v War­ringah Coun­cil [2015] brings some clar­i­ty to the law sur­round­ing legal pro­fes­sion­al priv­i­lege, espe­cial­ly when it comes to infor­ma­tion pre­pared by in-house counsel.

The ques­tion is – in what cir­cum­stances can legal pro­fes­sion­al priv­i­lege be claimed over infor­ma­tion pre­pared by in-house counsel?

What we have learned: 

  • Ensure that your in-house coun­sel’s con­tracts of employ­ment clear­ly reflect their duties and oblig­a­tions as a legal prac­ti­tion­er, and that inter­nal and exter­nal com­mu­ni­ca­tions do not mis­rep­re­sent their role as legal practitioners.
  • An in-house coun­sel’s com­mu­ni­ca­tions may not be priv­i­leged whilst they are oper­at­ing in a non-legal capac­i­ty with­in an organisation.
  • A claim for priv­i­lege under sec­tion 118 of the Evi­dence Act will also not suc­ceed if the com­mu­ni­ca­tion is from a staff mem­ber of the legal ser­vices’ depart­ment if that per­son does not hold a prac­tic­ing cer­tifi­cate or is not sub­ject to an employ­ment con­tract per­mit­ting that per­son to pro­vide legal advice.

Let’s con­sid­er the facts: 

John Hol­man con­sid­ered that War­ringah Coun­cil (Coun­cil) was liable for dam­age relat­ing to stormwa­ter drainage on his prop­er­ty. Mr Hol­man and Coun­cil exchanged cor­re­spon­dence in rela­tion to this issue from 2008 — 2014.

In 2012, fol­low­ing a let­ter of demand from Mr Hol­man, Coun­cil sought legal advice from both exter­nal and in-house lawyers in respect of the issues raised by Mr Holman.

Mr Hol­man lat­er applied to Coun­cil under the Gov­ern­ment Infor­ma­tion (Pub­lic Access) Act 2009 (GIPA) seek­ing access to doc­u­ments held by Coun­cil in rela­tion to the stormwa­ter arrange­ments affect­ing his prop­er­ty. Coun­cil grant­ed par­tial access on the grounds that some of the doc­u­ments request­ed were sub­ject to legal pro­fes­sion­al privilege.

Fol­low­ing sev­er­al inter­nal reviews and inves­ti­ga­tions from the Infor­ma­tion Com­mis­sion­er, Coun­cil con­tin­ued to affirm its orig­i­nal deci­sion cit­ing clause 5 of Sched­ule 1 to the GIPA relat­ing to legal pro­fes­sion­al privilege.

This final deci­sion was chal­lenged in the NSW Civ­il and Admin­is­tra­tive Tri­bunal (Tri­bunal) on 25 Feb­ru­ary 2015.

Tri­bunal Ruling:

On 19 Octo­ber 2015, the Tri­bunal slight­ly var­ied Coun­cil’s deci­sion, hold­ing that the vast major­i­ty of the request­ed doc­u­ments were sub­ject to legal pro­fes­sion­al privilege.

The Tri­bunal found that because Coun­cil sought legal advice from in-house coun­sel and an exter­nal solic­i­tor as a direct result of the con­cerns raised by Mr Hol­man, the doc­u­ments were inten­tion­al­ly cre­at­ed with priv­i­leged status.

Coun­cil’s in-house legal coun­sel both held prac­tis­ing cer­tifi­cates and their con­tracts of employ­ment referred to their inde­pen­dence as legal advi­sors. Their employ­ment con­tracts also recog­nised that they owed a para­mount duty to the Court over the Coun­cil when act­ing as a Legal Practitioner.

The Tri­bunal found that sec­tion 118 and/​or 119 of the Evi­dence Act 1995 (Evi­dence Act) applied to the doc­u­ments the sub­ject of the pro­ceed­ings, except for one doc­u­ment which was not priv­i­leged as it involved com­mu­ni­ca­tions from a Coun­cil employ­ee with­in a legal ser­vices’ depart­ment who did not hold a prac­tis­ing certificate.

The con­clu­sive pre­sump­tion against dis­clo­sure acti­vat­ed for all remain­ing doc­u­ments because they were pre­pared on a con­fi­den­tial basis in the knowl­edge that a for­mal legal claim would prob­a­bly be forth­com­ing and, lat­er, that lit­i­ga­tion was like­ly to ensue’.

Legal Pro­ce­dure involv­ing legal pro­fes­sion­al privilege:

When gov­ern­ments seek to estab­lish legal pro­fes­sion­al priv­i­lege in a GIPA con­text, the fol­low­ing steps should be followed:

Is there a pre­sump­tion in favour of disclosure? 

Yes.There is a pre­sump­tion in favour of the dis­clo­sure of gov­ern­ment infor­ma­tion unless there is an over­rid­ing pub­lic inter­est against dis­clo­sure (s 5 GIPA). 

Is there an over­rid­ing pub­lic interest?

Client legal priv­i­lege (legal pro­fes­sion­al priv­i­lege) is one such over­rid­ing pub­lic inter­est (cl 5, Sch 1 to GIPA).

See Sched­ule 1 to GIPA and sec­tion 14 GIPA for oth­er valid types of gov­ern­ment infor­ma­tion and pub­lic inter­est considerations.

Does the bal­anc­ing test’ apply?

An over­rid­ing pub­lic inter­est against dis­clo­sure’ only exists if the pub­lic inter­est con­sid­er­a­tions against dis­clo­sure out­weigh those con­sid­er­a­tions in favour of dis­clo­sure (s 13 GIPA).

This bal­anc­ing test does not apply to client priv­i­lege as cov­ered by Sched­ule 1, clause 5 GIPA (see [90]).

Is it appro­pri­ate to waive legal pro­fes­sion­al privilege?

An agency must con­sid­er whether it is appro­pri­ate to waive legal pro­fes­sion­al priv­i­lege before refus­ing access to the infor­ma­tion (cl 5(2) of Sch 1 to GIPA).

Once priv­i­lege is waived, it is waived as against all per­sons not just the per­son who sought infor­ma­tion under the GIPA.

There­fore waiv­ing priv­i­lege may have far-reach­ing con­se­quences that should be con­sid­ered pri­or to a deci­sion being reached.

Per­son­al fac­tors of the appli­ca­tion may also be con­sid­ered (s 55 GIPA).

Does legal pro­fes­sion­al priv­i­lege attach to cor­re­spon­dence with lawyers and legal advice ?
The con­clu­sive pre­sump­tion against dis­clo­sure oper­ates if sec­tions 118 or 119 of the Evi­dence Act apply: 
  1. Sec­tion 118 pre­vents the dis­clo­sure of con­fi­den­tial infor­ma­tion pre­pared for the dom­i­nant pur­pose of the lawyer/​s pro­vid­ing legal advice to the client.
  2. Sec­tion 119 pre­vents the dis­clo­sure of con­fi­den­tial com­mu­ni­ca­tions or infor­ma­tion pre­pared for the dom­i­nant pur­pose of the client being pro­vid­ed with pro­fes­sion­al legal ser­vices relat­ing to court pro­ceed­ings (includ­ing antic­i­pat­ed or pend­ing pro­ceed­ings) where the client is a par­ty to such proceedings.
There is a two-step process to apply­ing sec­tions 118 and 119
  1. First, the com­mu­ni­ca­tion must meet the require­ments set out in sec­tion 118 or sec­tion 119, or in both sections.
  2. Sec­ond, the deci­sion mak­er must be sat­is­fied that pro­duc­tion of the doc­u­ment would result in the dis­clo­sure of a con­fi­den­tial com­mu­ni­ca­tion or of the con­fi­den­tial con­tents of a doc­u­ment (see In the mat­ter of South­land Coal Pty Ltd (receivers and man­agers appoint­ed) (in Liq) [2006] NSWSC 899 at [14]; Tri­bunal at [85])
Does legal pro­fes­sion­al priv­i­lege attach to advice pro­vid­ed by in-house counsel?
In-house lawyers are enti­tled to claim priv­i­lege on behalf of their employ­er as a client (see def­i­n­i­tion of client’ in s 117 of Evi­dence Act and Syd­ney Air­ports Cor­po­ra­tion Ltd v Sin­ga­pore Air­lines Ltd [2005] NSW­CA 47).

This is sub­ject to the caveat that in-house lawyers also have oth­er func­tions, and that priv­i­lege does not attach to infor­ma­tion that does not sat­is­fy the require­ments of sec­tions 118 – 119 of the Evi­dence Act.
Does legal pro­fes­sion­al priv­i­lege attach to com­mu­ni­ca­tions from non-lawyers?
Where non-lawyers assist to cre­ate doc­u­ments and com­mu­ni­ca­tions in con­nec­tion with the prepa­ra­tion of con­fi­den­tial infor­ma­tion for the pur­pose of lit­i­ga­tion or legal advice, priv­i­lege still attach­es under sec­tion 119 of the Evi­dence Act.

If doc­u­men­ta­tion or com­mu­ni­ca­tions are not just pre­pared in the ordi­nary course of busi­ness and would not have come into exis­tence unless the cur­rent or antic­i­pat­ed pro­ceed­ings exist­ed, then priv­i­lege is also like­ly to attach.