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Australian Law Reform Commission - Reform Journal |
Rebuttable presumption: the way forward for Legal Professional Privilege?
* By Tom Smyth and Christian Strauch
This submission concerns the reference placed before the Australian Law Reform Commission ('ALRC') by the Attorney-General on 29 November 2006. It is therefore not a broad-brush consideration of the nature, purpose or merits of the common law principle of legal professional privilege. This submission, like the referral to which it is directed, is concerned only with the desirability of further statutory modification or abrogation of legal professional privilege in the context of Commonwealth agencies' use of their coercive or investigatory powers.
The key aspects of this submission are, firstly, a description of the problem which has been referred to the ALRC for consideration— namely the occasional abuse of a broad and inflexible common law immunity. There, we consider legal professional privilege in the context of current Commonwealth agencies' investigatory functions and use of their coercive powers. Secondly, we critique the law of legal professional privilege as it currently stands. Thirdly, we lay out our proposal for reform of the law of legal professional privilege and provide a set of draft provisions that we say represent one solution to the problems we identify. Finally, we discuss strategies for the implementation of our proposal, looking specifically at jurisdictional issues, as well as more practical considerations. At the outset, however, it is instructive to consider the nature of the principle of legal professional privilege.
Legal professional privilege traditionally justifies its extension of absolute confidentiality by two streams of reasoning: firstly, privacy; secondly, the public interest. The privilege is absolute, and 'if a balancing exercise was ever required...it was performed once and for all in the sixteenth century, and since then has applied across the board in every case, irrespective of the client's individual merits'. 1 So as to maintain the underlying principles of legal professional privilege in a context of its occasional misuse, tactical use, or, abuse, this submission proposes a statutory framework and a judicial process, each of which is designed to curb the possibility of abuse.
At the heart of our proposal is an attempt to resolve the conflict between two aspects of the public interest: on one hand, the public interest in full disclosure; on the other, the public interest in the integrity and strength of the legal system and its ability to uphold established common law doctrines. We say that the correct way to incorporate common law legal professional privilege into the modern statutory environment is by enactment of a rebuttable presumption of privilege, removable only by judicial process.
Problem Description
The misuse and abuse of claims of legal professional privilege
The high-minded ideals we may glean from the common law should not distract from the fact that claims of legal professional privilege can be used for lower purposes. The resolution of a question over the legal professional privilege status of communications will necessarily involve recourse to a court. No doubt, the spectre of protracted litigation2 may delay or frustrate investigations. In the Kennedy litigation, for example, claims of privilege delayed the execution of an Australian Securities and Investments Commission warrant by more than a year. Claims of privilege may also create a large volume of work for courts. Hart v Commissioner, Australian Federal Police, 3 for example, was a situation in which privilege was claimed over the equivalent of 200,000 documents. No doubt lawyers' ability to make such claims and the attendant time and expense of litigation leaves the law of privilege open to abuse by strategic moves in litigation.
The Cole Royal Commission
The scope for abuse of legal professional privilege, substantively, and as a tool of legal strategy, was lain bare most recently during the Cole Royal Commission. Relevantly, the Australian Wheat Board (AWB) challenged the Commission's examination of a document it had supplied, allegedly by mistake, on the basis of legal professional privilege. In AWB Ltd v Cole, 4 the Federal Court rejected the contention that the document was privileged, and held that the Commissioner did not have a power to determine claims for legal professional privilege. 5
Parliamentary reaction was swift. The Royal Commissions Amendment Act 2006 (Cth), an Act to amend Royal Commissions Act 1902 (Cth), was the result. That Act provided the Commissioner with a power to require the production of a document for the purpose of making a finding about whether it is properly characterised as privileged.
In its report, the Cole Royal Commission said that, on legal professional privilege, '[t]he issue for consideration is whether the public interest in discovering the truth should prevail over the private interest of companies or individuals in maintaining claims of legal professional privilege'.
The AWB raised approximately 40 claims of client legal privilege during the Inquiry, involving up to 1,400 documents. Ultimately the AWB did not pursue its claims of legal professional privilege over a substantial majority of claims in actions in the Federal Court. Presumably, this situation provided some impetus for consideration of the current referral. 6
In considering reform, it is imperative to bear the historical and jurisprudential roots of the relevant law constantly in mind. This submission would therefore be weak indeed if it did not take account of the development of legal professional privilege— a principle that has been described as a 'a practical guarantee of fundamental, constitutional or human rights', 7 'essential for the orderly and dignified conduct of individual affairs', 8 and 'of great importance to the protection and preservation of the rights, dignity and freedom of the ordinary citizen under law'. 9 It is to that analysis we move now.
Legal professional privilege: history and purpose
Initially, legal professional privilege arose from a duty of confidence, and so attached to practitioners, not clients. 10 Judicial repudiation of that rule led to its reformulation, and fostered a theory that 'looked to the necessity of providing subjectively for the client's freedom of apprehension in consulting his legal advisor'. 11 Recognition that the privilege was one of the 'client and the public' 12 led, from the beginning of the 19th century, to the development of the currently prevailing body of jurisprudence.
In general, common law legal professional privilege arises— in protecting the interests of the client and the interests of the public— to protect the integrity of legal processes. Litigation, in Sir George Jessel MR's reasoning in Anderson v Bank of British Columbia,13 can only be conducted by professionals; therefore, persons having recourse to those professionals should 'be able to place unrestricted and unbounded confidence in the professional agent'.14 However, confidentiality cannot be the only reason for the privilege. 15 The other reason for the principle is the common law's recognition that 'the involvement of representatives skilled in the law who had been fully instructed was indispensable to the proper functioning of the legal system’16 or, alternatively, 'the perfect administration of justice'.17
Clearly, the common law rules discussed above arose and found their application in adversarial proceedings. This referral is concerned with altogether different processes. As statements of principle, 18 however, their force is not dulled by a transfer from an adversarial to an inquisitorial or investigatory field of operation. The privilege serves the public interest by protecting the administration of justice 19— and, as Wilson J pointed out in Baker v Campbell, the perfect administration of justice is not 'confined to legal proceedings'.20
Commonwealth agencies' use of coercive or investigatory powers no doubt affect legal rights, obligations and legitimate expectations at least as great a degree as litigious processes did in an earlier period. The common law principles 21 discussed above, as we said earlier, must therefore be borne in mind as further statutory abrogations or modifications — by their nature, stronger tools than common law development—are contemplated.
In summary, the purpose of legal professional privilege is to instil confidence in persons seeking or receiving legal advice that the content of communications between their legal advisors and themselves will remain confidential, so as to protect individual interests, maintain the fairness and integrity of the legal system, and instil public confidence in that system. As has been noted, 'its efficacy as a bulwark against tyranny and oppression depends upon the confidence of the community that it will in fact be enforced'.22
Legal professional privilege has been termed a 'common law immunity'. 23 That being so, courts will not construct a statutory intention to abrogate its operation in the absence of clear words to that effect. 24 Whether it will engage to protect purportedly privileged communications will therefore be a question of statutory clarity: it may be ousted by clear provision, 25 but not by implication.26
The question confronted in the remainder of this submission, therefore, is to what extent the public interest claims of Commonwealth agencies' use of coercive or investigatory powers will justify the abrogation of any of those immunities.
The existing law
Presently, legal professional privilege is said to arise in three separate situations. 27 Firstly, advice privilege, which will operate to protect communications between lawyer and client.28 Secondly, litigation privilege, which will operate to protect documents, the dominant purpose of which is for use in litigation. 29 Finally, third party privilege, which will protect disclosure of otherwise confidential information passing between a lawyer and third parties,30 even in the absence of pending litigation. 31
Most often, the constitutive statutes of the agencies this referral concerns are silent about the operation of legal professional privilege upon whatever coercive or investigatory powers are conferred upon them.32 This has led to a situation in which common law legal professional privilege applies unless and until an amending statute (usually fact-specific and usually related to a perception of the public interest) is enacted. Clearly this is an unsatisfactory situation. It creates uncertainty in the relationship between client and lawyer; the nature of the enactments to which we refer make them arbitrary and exclude the prospect of judicial review; broadly, enactments such as the Royal Commissions Amendment Act 2006 (Cth) may be termed retrospective legislation.
Evidently, there is a need for clarity and a need to eliminate the uncertainty inherent in the parliament's legal professional privilege enactments up to now. At the same time, however, there is a need to maintain privacy to as great an extent as possible, and to maintain the public interest by the means that seem most appropriate to the factual situation in which a legal professional privilege dispute arises.
Critique of the existing law
Currently, common law legal professional privilege is abrogated in different ways. It may be modified by statute, 33 or by a rule of court.34 Heydon notes that 'enactments having such an effect [as to abrogate legal professional privilege] are rare'. 35 Legal professional privilege is essential to the legal process; even more, it is essential to public confidence in the legal process. The fact that, as was pointed out in Maurice, its ability to accomplish its purpose depends upon community confidence that it will be enforced36 means that public confidence in the law and in the system that interprets and applies it is necessarily undermined by every short-term and fact-specific statutory abrogation 37 the privilege suffers.
We say that one option is that statute withdraw from the field altogether. In the normal course, the common law is a more subtle and more nimble means of legal development than is statute. However, the inflexibility to which we adverted above 38 speaks against the common law methodology allowing for exceptions, exclusions, or the refashioning of the privilege we advocate. In an age in which statute dominates the legal landscape, our proposal does not cut against the grain.
We say that any attraction the statutory withdrawal proposal has is connected to its key feature, judicial involvement. A uniform statutory provision which contains a rebuttable presumption of legal professional privilege over documents and communications—and which institutes a truncated judicial process for determination when the presumption is in dispute—we propose that this is therefore the correct path for the law to take.
Proposal for law reform
Our proposal is therefore not one of substantive reform. It is designed to maintain the basic purposes of legal professional privilege while attempting to minimise its openness to abuse. Commonly, broad abrogations of legal professional privilege are legislated as they become necessary in the midst of public enquiries, such as the Longford Royal Commission 39 or the Cole Inquiry.40
As is noted in the Administrative Review Council Report (ARC) Report, 'legal professional privilege is a contentious and evolving area'.41 We say that acceptance of that fact, as well as a consideration of the underlying principles we discussed above—and of the limitations of statute— lead inevitably to a preference for statutory minimalism in this area.
The proposed uniform division
As is noted in the ARC Report, agencies' constitutive statutes are most often silent in relation to legal professional privilege.42 This leads to a situation in which the common law privilege presumptively applies, of its own force, unless abrogated as the legislature's conception of the public interest demands. We say that an entirely more satisfactory, and more certain, approach would be to enact a guideline provision in the terms of the one lain out below.
1. Privileged Documents and Communications
Where a document or other communication is undertaken or reduced to writing in order to:
a) record a legal practitioner's legal advice to the practitioner's client; or
b) record a legal practitioner's preparations or drafts of legal advice to be provided to a client; or
c) record the contents of meetings, consultations or other discussions between a legal practitioner an the practitioner's client; or
d)record a legal practitioner's meetings, consultations, or other discussions, oral or written, with other legal practitioners or other persons reasonably consulted by the practitioner in the course of advising a client the document or other communication will be assumed to be subject to legal professional privilege, and, subject to s 2 of this Act, [the agency] must not require production of it.
2. Application in Furtherance of Public Interest
Where [the agency]; reasonably concludes that, in furtherance of the public interest, a document of a type mentioned in s 1 should be produced, it may apply to the Federal Court for a Production Order.
3. Application to Federal Court for Production Order
On the application of [the agency], the Federal Court must entertain submissions from:
a) [the agency]; and
b) the legal practitioner’s clientabout whether the public interest will justify an order to produce the disputed document.
4. Federal Court Determination of Production Order Application
(1) In determining an application made under s 3, the Court must have regard to:
a) whether the public interest, in the circumstances of the application, warrants production of the document; and
b) whether [the agency’s] investigation or enquiry is likely to be materially assisted by the document; and
c) the common law principles that led to the construction of legal professional privilege.
(2) In determining an application made under s 3, the Court:
a) may require access, without prejudice to the respondent’s interests, to the documents in dispute;
b) may determine the application on the basis of written submissions alone;
c) must determine the application within ten (10) working days of lodgement of [the agency’s] application.
(3) For the purposes of s 4(1)(a), to determine whether public interest warrants production of the document, the Court may consider:
a) the nature of the advice sought;
b) the respondent’s purpose in seeking the advice;
c) the alleged conduct which is the subject of inquiry by [the agency];
d) the nature of any adverse finding based on the document;
e) the nature of the activities undertaken by [the agency];
f) the benefit to the community of full disclosure of the circumstances of the alleged conduct; and
g) any other consideration the Court considers relevant.
We say that this set of provisions strikes a balance between statutory certainty (the enumerated considerations in s 4(1)) and judicial involvement (especially s 4(1)(c)). It preserves the balance between the public interest and privacy, which legal professional privilege has traditionally demanded, and, by involving the judiciary in the determination of the relevance and public interest value of the documents, eliminates the need for last-minute legislative interference in the field in aid of the public interest. It also eliminates the tactical advantage of a claim of legal professional privilege (s 4(2)(c)).
Within guidelines, the proposed provisions also transfer the burden of the development of the law of legal professional privilege back to the courts, and allow development of a body of principle within the bounds of the common law (s 4(1)(c)). They are also deliberately not field-covering — for example, they will not necessarily bring into their s 1 scope documents or communications produced for an improper or illegal purpose, thus preserving the Kearney 43 ratio. As well, the s 1 categories may need to be expanded, s 1 broadly reflects the 2003 amendments to s 155(7)(B) of the Trade Practices Act 1974 (Cth), so as not to require the production of documents to which privilege attaches.44
Our proposed provision also has the notable strength that, in contrast to measures such as the Royal Commission Amendment Act 2006 (Cth), decisions made under it are necessarily the subject of a judicial process. Any decision therefore becomes reviewable on appeal from the Federal Court, or, alternatively, by s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth), as the decision is clearly one 'under an enactment' for ss 3(1) of that Act. We say that explicit and substantive judicial involvement of this type and degree will be sufficient to dispel community concerns about the limited encroachment into the common law privilege the proposed provisions contemplate.
The provisions allow for a judicial development of the law of legal professional privilege, in a clear framework which imposes clear limitations. They would clarify the legal position of all parties to a dispute in relation to privilege, and eliminate the need for fact-driven statutory encroachments into the field. In essence, they guarantee the continuance of a principled body of jurisprudence on legal professional privilege.
Strategies for implementation
Were our proposed provisions accepted in substance, we say that the implementation process would be simple. Firstly, the categories would need, after a process of consultation and consolidation, to be expanded or contracted to reflect the agency's area of operation. Secondly, the revised provisions would need to be incorporated into the agency's constitutive statute.
As we have suggested incorporation into agencies' constitutive statute, we envisage that the limitations and process contained in the proposed provisions would apply across all of an agency's operations — and so there would be no need to reach further into their statutory frameworks to ensure compliance. The complexities of the Evidence Act 1995 (Cth) may present theoretical obstacles to our proposal. 45 The final form of the provisions would be determinative of the nature and extent of those problems, however, so it is not productive to comment upon them here.
The outstanding issue, therefore, is the extent to which our proposal can be effective if it applies only to Commonwealth agencies. The proposed provisions would represent a substantial shift in the substantive body of the law, and a shift in the procedural tactics available to lawyers during litigation or during investigative processes. Such a change could no doubt take place in respect of Commonwealth agencies only, but we say that the regime would benefit inestimably from parallel enactments in respect of the state and territory agencies exercising analogous state and territory based powers. Such parallel enactments therefore form part of our proposal.
Conclusion
In the space which remains to us, we wish only to restate the substance of the problem we have sought to address and the substance of the solution we propose. Analysis of the cases revealed the two strands of principle underlying legal professional privilege: privacy, and the public interest. As we said at the outset, the public interest is an amorphous concept, especially where, as here, it can be invoked on either side of the argument. The problem that this paper has sought to address is that the absolute, unbalanced confidentiality that legal professional privilege imposes is open to abuse. We have therefore sought to formulate a proposal that maintains the underlying principles of legal professional privilege while minimising the privilege's openness to abuse of the kinds which have occasionally been observed.
Our proposed provisions confine more narrowly than the common law the types of documents and communications to which privilege will attach. Those documents, in our proposal, are then subject to a rebuttable presumption of a privileged status; it is open to an agency to challenge this status in a curial process, on the basis of public interest only. The substantive content and operation of privilege is thereby, we say, maintained.
Our proposal contemplates measured deliberation (as opposed to ad hoc legislation) and a very great degree of judicial (as opposed to political) involvement. It also allows for judicial review or appeal of a statutorily confined decision, and in general is designed to inspire public confidence in what would amount to a very slight substantive change to the relevant law. We say that, slight as it is, our proposal interferes little with the public confidence aspect of the privilege, and not at all with the privacy aspect.
Endnotes
1. R v Derby Magistrates' Court; Ex parte B [1995] UKHL 18; [1996] AC 487, 508 (Lord Taylor of Gosforth CJ).
2. Kennedy v Wallace [2004] FCA 332; (2004) 208 ALR 424;3.
3. [2002] FCAFC 392; (2002) 124 FCR 384.
4. (2006) 152 FCR 382.
5. Commonwealth of Australia, Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme, Report of the Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme (2006) vol 1, 190.
6. See Nickless & Priest, 'Call to Limit Legal Professional Privilege', Australian Financial Review (Sydney), 23 Apr 2007, 7; Drummond, 'Client Privilege a Hot Potato for Law Reform Body', Australian Financial Review (Sydney), 27 Apr 2007, 51.
7. A M & S Europe v Commission of the European Communities [1983] QB 878, 941.
8. Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52, 89 (Murphy J).
9. Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475, 490 (Deane J).
10. Taylor v Blacklow [1836] EngR 1019; (1836) 132 ER 401; see also Wigmore, Evidence in Trials at Common Law: Wigmore on Evidence (McNaughton revised 4th ed, 1961) [2290]; J Heydon, Cross on Evidence (7th ed, 2004) [25210] et seq.
11. J Wigmore, Evidence in Trials at Common Law: Wigmore on Evidence (J McNaughton revised 4th ed, 1961, [2290].
12. Wright v Mayer [1801] EngR 384; (1801) 31 ER 1051 (Eldon LC); ibid.
14. Ibid 649 (Jessel MR).
15. Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52, 93 (Wilson J); D v National Society for the Prevention of Cruelty to Children [1977] UKHL 1; [1978] AC 171, 237, 239 (Lord Simon of Glaisdale).
16. Baker v Campbell [1983] HCA 39; (1983) 153 CLR 52, 94 (Wilson J).
17. Bullivant v Attorney-General (Vic) [1901] AC 196, 200–1(Earl of Halsbury LC).
18. See Minet v Morgan (1873) LR 8 Ch App 361, 366.
19. Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49, 64 (Gleeson CJ, Gaudron & Gummow JJ); see also Grant v Downs [1976] HCA 63; (1976) 135 CLR 674, 685 (Stephen, Mason & Murphy JJ).
20. [1983] HCA 39; (1983) 153 CLR 52, 94.
21. See Grant v Downs [1976] HCA 63; (1976) 135 CLR 674.
22. Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475, 490 (Deane J).
23. The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543, 553 (Gleeson CJ, Gaudron, Gummow & Hayne JJ).
24. Potter v Minahan [1908] HCA 63; (1908) 7 CLR 277, 304 (O'Connor J); see, generally, Coco v The Queen [1994] HCA 15; (1994) 179 CLR 427.
25. Corporate Affairs Commission (NSW) v Yuill [1991] HCA 28; (1991) 172 CLR 319.
26. The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543
27. Desiatnik, Legal Professional Privilege in Australia (2nd ed, 2005), 23–4.
28. Interchase Corporation Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (1999) 1 Qd R 141.
29. Grant v Downs [1976] HCA 63; (1976) 135 CLR 674, 683 (Stephen, Mason & Murphy JJ).
30. See, eg, Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59; (2002) 4 VR 332.
31. Pratt Holdings v Commissioner of Taxation [2004] FCAFC 122; (2004) 136 FCR 357.
32. See Administrative Review Council, Government Agency Coercive Information-Gathering Powers [Draft Report] (2007).
33. See, eg, Australian Investments and Securities Commission Act 2001 (Cth) s 192; Corporations and Securities Panel v Bristile Investments Pty Ltd [1999] WASC 183; (1999) 152 FLR 469.
34. See, eg, Uniform Civil Procedure Rules 1999 (Qld) ch 14, pt 2; Parr v Bavarian Steak House Pty Ltd [2000] QCA 429; [2001] 2 Qd R 196, 199 (Pincus JA), 199–200 (McPherson JA), 201 (Thomas JA).
35. Heydon, above n 10, [25285].
36. Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475, 490 (Deane J).
37. See, eg, James Hardie (Investigations and Proceedings) Act 2004 (Cth); Royal Commission Amendment Act 2006 (Cth); Special Commission of Inquiry (James Hardie) Records Act 2004 (NSW).
38. .See R v Derby Magistrates' Court; Ex parte B [1996] AC 487, 508 (Lord Taylor of Gosforth CJ); see also A A S Zuckerman, 'Legal Professional Privilege—The Cost of Absolutism' (1996) 112 LQR 535.
39. .Victoria, Royal Commission into the Esso Longford Gas Plant Accident, Final Report (1999).
40. Commonwealth of Australia, above n 5.
41. .Administrative Review Council, above n 32, 54.
42. Ibid 57.
43. Attorney-General (NT) v Kearney [1985] HCA 60; (1958) 158 CLR 500.
44. See Trade Practices Act Review Committee, Review of the Competition Provisions of the Trade Practices Act (2003) Recommendation [13.5].
45. See S B McNicol, 'Client Legal Privilege and Legal Professional Privilege: Considered, Compared and Contrasted' (1999) 18 ABR 189.
* Tom Smyth and Christian Strauch were winners of the Australian Law Reform Commission's 2007 Kirby Cup Competition.
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