Justifications for encroachment

12.38  Legal professional privilege is the common law’s way of resolving competing public interests: the public interest in the administration of justice, and the public interest in having all relevant evidence before the courts, in the interests of a fair trial.[51]

12.39  In Esso Australia Resources v Commissioner of Taxation, the High Court noted the ‘obvious tension’ between the policy behind legal professional privilege and ‘the desirability, in the interests of justice, of obtaining the fullest possible access to the facts relevant to the issues in a case’:

Where the privilege applies, it inhibits or prevents access to potentially relevant information. The party denied access might be an opposing litigant, a prosecutor, an accused in a criminal trial, or an investigating authority.[52]

12.40  ASIC also noted the public interest in having all relevant information ‘available to a court and to government agencies conducting investigations’.[53]

12.41  An encroachment of the privilege may be justified when Parliament considers that the common law has not struck the correct balance between the competing public interests in a particular instance. Two competing public interests are discussed below: the public interest in open and accountable government, and the public interest in the efficient and effective investigation of wrongdoing.

Open government

12.42  Moves towards more open government in Australia have included the passage of freedom of information legislation, the establishment of the office of the Commonwealth Ombudsman, protected disclosure legislation and the Australian Government Information Publication Scheme.[54] Some of these schemes require government agencies to make information available, for example, to an Ombudsman. Such activities may be inhibited by the strict application of legal professional privilege.

12.43  Legal advice to government is one example where legislatures may be justified in limiting or abrogating the privilege in the public interest of transparency and open government. Liam Brown has argued that the privilege is ‘difficult to rationalise when the client is the state’, and that a better position would be to require governments to justify the need for secrecy on a case by case basis.[55] Abrogating legal professional privilege for communications between lawyers and government representatives involved in proceedings relating to public misfeasance, for instance, may be in the interests of open and representative government. Several states in the United States have abolished legal professional privilege for state governments.[56]

Assisting investigations

12.44  Abrogation of legal professional privilege may sometimes be justified where the law is aimed at improving regulatory or investigative processes.

12.45    Some Commonwealth agencies possess coercive information-gathering powers to investigate complaints or instigate inquiries. It might be argued that the privilege should be abrogated when it creates an intolerable interference with these activities. ASIC has argued that the privilege may prevent or delay access to

material that may otherwise facilitate an expeditious and thorough investigation, the results of which would inform subsequent, likely more speedy, action, to be taken by ASIC. Litigating claims of client legal privilege, if necessary, is also costly.[57]

12.46  In its Privilege in Perspective report, the ALRC recommended that

in the absence of any clear, express statutory statement to the contrary, client legal privilege should apply to the coercive information-gathering powers of federal bodies. However, where the Australian Parliament believes that exceptional circumstances exist to warrant a departure from the standard position, it can legislate to abrogate client legal privilege in relation to a particular investigation undertaken by a federal investigatory body, or a particular power of a federal investigatory body.[58]

12.47  This recommendation was qualified by consideration of the following factors:

(a)     the subject of the investigation, including whether the inquiry concerns a matter (or matters) of major public importance that has (or have) a significant impact on the community in general or on a section of the community, or is a covert investigation;

(b)     whether the information sought can be obtained in a timely and complete way by using alternative means that do not require abrogation of client legal privilege; and especially,

(c)     the degree to which a lack of access to the privileged information will hamper or frustrate the operation of the investigation and, in particular, whether the legal advice itself is central to the issues being considered by the investigation.[59]

12.48  The recommendations in that report serve as a useful guide for legislatures considering abrogating legal professional privilege. They are consistent with the proportionality approach taken in this Inquiry and discussed in Chapter 2. That is, an important common law right such as legal professional privilege should only be limited by statute when the limitation has a legitimate objective, is suitable and necessary to meet that objective, and when the public interest pursued by the law outweighs the public interest in preserving the right. 

12.49  The Administrative Review Council’s 2008 report into the Coercive Information-Gathering Powers of Government Agencies supported the ALRC’s recommendations. The Council wrote that abrogation of the privilege should occur

only rarely, in circumstances that are clearly defined, compelling and limited in scope—for example, for limited purposes associated with the conduct of a royal commission.[60]

Unfounded claims

12.50  The privilege has the potential to hinder access by Commonwealth regulatory agencies to material that is not privileged. At common law a court may inspect documents over which privilege is claimed, to determine whether the claim is well founded.[61] However it does not appear that Commonwealth agencies, even those with coercive information-gathering powers, have the power to inspect documents over which privilege is claimed.[62] There is a risk that improper claims could be made. Over-claiming may cause considerable delay and expense if agencies are required to go to the courts to test claims of privilege.[63] Practices such as ‘blanket claims’ and over-claiming were discussed in the ALRC’s 2008 Privilege in Perspective report and procedural reforms were recommended to address this issue.[64] Such reforms could sometimes avoid the need to abrogate the privilege. ASIC supported the implementation of such mechanisms.[65]

12.51  To date, only the Royal Commissions Act 1902 (Cth) has been amended to allow the Commissioner to inspect documents for the purpose of determining whether the document is privileged. This amendment occurred in 2006, following the decision of Young J in AWB Ltd v Cole (No 5).[66] The Law Council of Australia (Law Council) has questioned whether this amendment was sufficiently justified, and suggested that it would have been preferable to abrogate the privilege for the AWB inquiry rather than more generally.[67]

Statutory protection

12.52  Most laws that abrogate legal professional privilege provide that the privileged material is not admissible in evidence against the person (except for proceedings relating to a failure to comply with a direction to provide information or documents, or proceedings for giving false or misleading information).[68] The protection afforded by such provisions may justify the abrogation of the privilege, by ensuring that the privilege is impaired as little as possible.[69]

12.53  The Law Council suggested that where the privilege is abrogated, use and derivative immunity should ordinarily apply to documents or communications revealing the content of legal advice, in order ‘to minimise harm to the administration of justice and individual rights’.[70] This Inquiry has not identified any statutes that abrogate the privilege and provide derivative use immunity—use immunity is the norm.