ALRC addresses costly disputes over client legal privilege

The Australian Law Reform Commission (ALRC) today released a Discussion Paper, Client Legal Privilege and Federal Investigatory Bodies (DP 73), containing 42 proposals aimed ataddressing lengthy and costly disputes over client legal privilege in federal investigations.

ALRC President, Professor David Weisbrot, said that the ALRC recognised the need for a clear and consistent approach to privilege.

“Client legal privilege is a fundamental principle of common law. It encourages clients to speak fully and frankly with their lawyers, so that they can receive the best possible legal advice—including advice on how to comply with the law.

“However, our research and consultations reveal that privilege claims are sometimes used as a tactic to delay or frustrate investigations or legal proceedings, such as happened in the AWB Royal Commission. There are many cases in which disputes over privilege have taken many years to resolve—and that is before the court can even consider the merits of the case.

“One thrust of our proposals is that we need a simple, less costly process for resolving disputes over privilege. Another is where there is evidence that privilege has been misused for cynical or tactical reasons, with the aim of frustrating or delaying the investigations or proceedings. This should be grounds for disciplinary action by legal professional associations.”

Commissioner in charge of the Inquiry, Professor Rosalind Croucher, said that much of the confusion and uncertainty stems from a lack of legislative clarity and transparent processes. “Our research has identified 41 federal investigatory bodies—as well as Royal Commissions that are established from time to time—that have coercive information-gathering powers. Many of the laws governing these bodies provide no guidance about whether client legal privilege applies wholly or in part. In those laws that do address privilege, there is no consistency of language or approach.

“We propose that where privilege applies, there should be a consistent legal framework. Where Parliament determines that privilege should be abrogated, this should be on the basis of clear principles—that is, where there is a significant public interest, and where legal advice is central to the matters being investigated. Where it is abrogated, appropriate safeguards should be put in place about the subsequent use of the information disclosed.”

Other key proposals include:

  • to allow privilege to apply to advice on taxation law provided by accountants— in effect formalising the Australian Tax Office “accountants’ concession”;
  • requiring parties claiming privilege to provide details of privileged documents and the basis of the claim; and
  • improved education and training for lawyers concerning their ethical responsibilities in relation to making privilege claims.

DP 73, Client Legal Privilege and Federal Investigatory Bodies, is available from the ALRC website, The ALRC is seeking community feedback before a final report is completed in December 2007. Submissions close on 1 November 2007.