Client legal privilege in federal investigations

In this Inquiry, the ALRC examined the application of client legal privilege (also known as legal professional privilege) within the context of federal investigations.

The Inquiry was announced as part of the Australian Government’s response to the Royal Commission that investigated the conduct of the Australian Wheat Board in relation to the United Nations ‘Oil for Food’ programme (the AWB Royal Commission). During that Royal Commission, the Hon Terence Cole QC was faced with extensive claims to privilege, which delayed the Royal Commission for over a year. Commissioner Cole ultimately recommended that consideration be given to providing that legal professional privilege not apply to royal commission proceedings.

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Key recommendations

ALRC Report 107 makes 45 recommendations.

The central theme of the ALRC’s recommendations is that client legal privilege is a doctrine of fundamental importance in the common law, and should only be abrogated or modified in exceptional circumstances. This should be provided by legislation of general application, enacted by the Australian Parliament.

A key message from submissions and consultations was that, to the extent that there is a problem in relation to client legal privilege in federal investigations, it is primarily in the domain of practice and procedure. To this end, the ALRC’s recommends that federal client legal privilege legislation include a range of requirements governing the making and handling of claims of privilege. These should include requirements in relation to:

• the forms of notification that federal bodies should give about the application of privilege to their coercive information-gathering powers;
  provision of a reasonable opportunity to claim privilege;
• the details of claims that should be provided, if requested by a federal body; and
  the certification of the claim by a lawyer, if requested by a federal body.
• The ALRC recommends the development of a model procedure for resolving disputed privilege claims, including a discretion for a federal body to offer a claimant an opportunity to agree to an independent review process.

Other key recommendations include:

• the establishment of a ‘tax advice privilege’, to protect the confidentiality of tax advice given by independent professional accountants. This would effectively formalise the Australian Taxation Office “accountants’ concession”, and would only apply in relation to information sought by the Commissioner of Taxation;
• introducing a model procedure for resolving disputes about privilege;
• improving lawyers’ understanding of their legal and ethical obligations in this complex area, through targeted legal education; and
• clarifying and strengthening the professional disciplinary procedures to apply in cases where the assertion or maintenance of privilege claims may amount to unethical conduct.

Implementation

The recommendations of ALRC Report 107 have not yet been implemented.