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  • Exceptions

    Legal professional privilege does not always protect communications, including if:

    • privilege is waived, either expressly or impliedly
    • there is evidence of illegal or improper purpose and the communication was made to further that purpose
    • the communication consists of observed facts.

    Legal professional privilege can be waived by you, a lawyer acting on your behalf or through the conduct of a third party. Waiver of privilege can be express or implied.

    'Express waiver' (or intentional waiver) usually occurs where you consent to the release of certain privileged communications or documents.

    'Implied waiver' (or unintentional waiver) may occur in the circumstances where your conduct is inconsistent with maintaining the privilege.

    Privilege may be waived if a third party other than your lawyer (for example, a bank) has custody of your documents that are subject to a privilege claim.

    Illegal or improper purpose

    Legal professional privilege will be lost if a communication is made for a purpose that is contrary to public interest; that is, where the communication is made in furtherance of an illegal or improper purpose. The illegal or improper purpose covers all forms of fraud and dishonesty. This applies whether or not the lawyer dealing with the matter is ignorant of the illegal purpose.

    It also applies where the illegal or improper purpose was that of a third party, even if neither you nor your lawyer had an improper purpose.

    Example – Improper purpose

    Our officer, Tom, was conducting an audit of the income tax affairs of a promoter of a mass marketed scheme.

    Communications were made by the lawyer for the dominant purpose of hindering us, by detailing how the records could be shielded from us by creating a double set of books.

    The communications were determined to be for an improper purpose. On that basis, privilege did not apply to the documents of interest.

    End of example
    Observed facts

    Legal professional privilege will not apply to communications which evidence transactions which do not by themselves amount to the giving or receiving of advice or for litigation – for example, contracts, conveyances, declarations of trust or receipts.

    We can request information from an adviser about clients who have purchased, implemented or entered into certain arrangements. The provision of names and addresses in these circumstances does not require the disclosure of privileged communications to us.

    Documents partly privileged

    In some cases, only parts of a document are created for the dominant purpose of legal advice or litigation and will be covered by legal professional privilege – for example, minutes of a meeting.

    In this situation, the part you are claiming is privileged must satisfy the dominant purpose test. You must provide the complete document and redact (edit out) the part you claim is subject to privilege.

    In-house lawyers

    We recognise that legal professional privilege can apply to advice given by a lawyer employed by the client, provided the dominant purpose test is satisfied and the lawyer:

    • can demonstrate an appropriate level of independence from the employer client
    • was acting in the capacity of a lawyer at the time that the communication was made
    • has been admitted to practice as a lawyer.

    If an in-house lawyer holds more than one position or function, it may be unclear as to which role they are acting in when providing the advice – a person giving legal advice may not necessarily be acting in a lawyer and client relationship.

    When reviewing the level of an in-house lawyer’s independence, we may consider:

    • the lawyer’s role within the organisation and their reporting lines to management
    • if the lawyer's remuneration is linked to business performance
    • if the lawyer has authority to report directly to the directors where their opinion differs from management's position.

    A communication from an in-house lawyer must be made (or the document prepared) in their capacity as a lawyer, and not in a management role or other capacity.

    The lawyer must be acting in a legal or professional capacity, and the advice given must be of a legal nature. Generally, the advice cannot relate to policy or executive decision making, or be commercial in nature.

    The following factors may be relevant to an in-house lawyer's legal or professional capacity:

    • how the lawyer signed or described him or herself in the document or communication
    • whether the lawyer also holds a senior role within the organisation, and if job descriptions are attached to each position
    • whether the lawyer has several functions, positions, roles and responsibilities within the company
    • the capacity in which the lawyer was acting at the time the document or communication was made or prepared.
    Third parties

    Legal professional privilege can extend to non-agent third parties who have made a communication – for example, communications may be authored by an accountant for their client to be used in obtaining legal advice.

    The third-party communication must satisfy the dominant purpose test, and the communication must be confidential to be privileged.

    Communications between a lawyer or client and a third party which are for actual or reasonably contemplated litigation may also be privileged.

    Example –Third parties

    Nathan seeks advice from his accountant on structuring a transaction. Both Nathan and his accountant intend to submit the advice to a lawyer for comment.

    While the lawyer's comments may be privileged, the accountant’s advice will not be because its purpose is independent of the need for legal advice.

    Alternatively, Nathan may be able to claim that these advice documents should remain confidential if they are restricted under the accountants' concession.

    End of example
      Last modified: 22 Jun 2022QC 56551