A guide to client legal privilege in the workers compensation context – An ACT perspective

21 June 2016


The concept of client legal privilege (previously known as legal professional privilege) often seems confusing, both for clients and their lawyers. This is demonstrated by the significant number of cases considering whether a party is able to maintain a claim for privilege over certain communications or documents, or whether the privilege has been lost or waived.

Client legal privilege is protected by both statute (in the ACT, by the Evidence Act 2011 – ‘the Evidence Act’) and by common law. The right exists for the purposes of public interest, to promote full and frank disclosure between clients and their lawyers to enable the lawyers to give proper advice and recommendations.

For workers compensation insurers, the question as to whether client legal privilege can be maintained usually arises in the context of their lawyers providing discovery on the insured’s behalf, or when a claimant’s solicitor requests a copy of the insurers file, or when a Notice for Non-Party Production or Subpoena is issued requiring production of the file, which often contains factual investigation reports and the like.

When does client legal privilege apply?

Client legal privilege can be claimed in respect of communications between a lawyer and their client, the client’s insurer, agent, or broker. However, the document (or communication) must have come into existence for the dominant purpose of either obtaining legal advice (s118 of the Evidence Act), or for use in litigation or anticipated litigation (s119 of the Evidence Act).

Rule 601(a) of the ACT Court Procedure Rules 2006 (‘CPRs’) provides that a document is privileged from production only if it is a document of which evidence could not be adduced, or could not be adduced over the objection of a person, because of the operation of the Evidence Act (other than sections 128 or 130 of that Act).

That means that, if s118 or s119 of the Evidence Act apply, the document is privileged under Rule 601. If privilege is disputed, it is well established that the onus of proving that the documents are privileged lies with the party claiming privilege.

When is client legal privilege lost?

Sections 121-126 of the Evidence Act set out the circumstances in which a claim for privilege might be ‘lost’ (or waived). Of most relevance in this context, is s122. Section 122 provides that client legal privilege may be waived with the consent of the client or party. This section is relevant to disclosure by an insurer in response to a request for a file, or in response to a Subpoena or Notice for Non-Party Production. So, if an insurer discloses a document which would otherwise have been privileged, that insurer will be taken to have waived any claim for privilege over that document.

That said, ‘accidental’ disclosure of privileged documents (such as a legal advice) can be remedied, with the co-operation of the party to whom that document has been disclosed in error. In fact, a solicitor has a duty to remedy such a disclosure. In a 2013 decision, the High Court of Australia sets out the steps to be taken in such a case in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46.

In short, if a lawyer suspects that a privileged document has been disclosed in error, the document should be returned to the lawyer of the party who disclosed the document and they should be notified that their client has discovered a document which on its face is privileged. That party should then be given the opportunity to advise whether the document was inadvertently disclosed or whether privilege was (or is) waived in respect of the document. So, if an insurer suspects that it may have accidentally disclosed a privileged document, it should write to the party to whom that document has been disclosed and advise them that the document was inadvertently disclosed, and privilege is not waived.

Dominant purpose

Privilege applies to a document or communication brought into existence for the dominant purpose of obtaining legal advice, or for use in litigation or anticipated litigation.

A well-known authority in this area is the decision of the ACT Supreme Court in Catalina Norma D’Ambrosio v Berkeley Challenge Pty Limited [1997] ACTSC 35 which arose out of a dispute over a claim for privilege in an employment-related personal injury claim.

In that matter the Court considered whether or not correspondence between an employer’s insurer and a doctor, and between the employer’s insurer and an investigator, were privileged. The plaintiff had applied to the Court for an order compelling production of those documents, over which privilege had been claimed in an affidavit of discovery.

The Court noted there was a particular difficulty with workers compensation claims, and establishing a claim for privilege on the basis that the document came into existence either for the dominant purpose of obtaining legal advice, or for use in proceedings, or anticipated proceedings. The difficulty arises because, in the majority of cases, legal advice is not sought, proceedings are not brought or anticipated, and the claim is resolved without the insurer ever having sought the advice of a lawyer. Indeed, it was noted that it is often difficult to determine at the early stages of a claim whether or not the matter will (or is likely to) proceed to litigation.

At paragraph 23 the Court confirmed that the test to be applied for ascertaining the dominant purpose, or whether a particular purpose was dominant, is an objective test having regard to all of the circumstances. The Court found (at paragraph 25) that the employer did not show “that the coming into being of the confidential communications or documents passing between the insurer on the one hand and the investigators and the doctor on the other hand was for the dominant purpose of the defendant being provided with professional legal advice relating to an anticipated legal proceeding in which the defendant might have been a party.” Accordingly it was determined that the claim for privilege under s119 failed.

Practical tips

Client legal privilege can be claimed over documents and other communications passing between a lawyer and their client, or the client’s insurer, agent, or broker. The document must have come into existence for the dominant purpose of obtaining legal advice, or for use in litigation or anticipated litigation.

Whether or not a claim for privilege can be maintained will turn on the particular circumstances of each case. A claim for privilege may be waived or ‘lost’ if it does not meet the criteria in s118 or s119 of the Evidence Act.

If insurers are served with a Subpoena or Notice to Produce a copy of their files relating to a particular claimant, they should speak to their lawyers before disclosing documents. If insurers disclose privileged documents in response to a Subpoena or Notice, any claim for privilege will likely be waived.

Insurers should also be reminded that they might be able to maintain a claim for privilege over a document on the basis that litigation is anticipated, even if no proceedings have actually been commenced or threatened.

If insurers speak to their lawyers early on in a claim, there is likely to be a stronger argument that a document or communication came into existence for the dominant purpose of obtaining legal advice, or in anticipation of proceedings.

Examples of documents over which privilege can likely be maintained are:

  • Emails, letters and file notes relating to discussions between insurers or the insured (or their agents) and their lawyers;
  • Advices from a lawyer;
  • Factual investigation reports and associated correspondence – if they have been obtained in a matter to which the disclosure obligations of the Civil Law (Wrongs) Act 2002 (ACT) (‘CLWA’) do not apply, and for the purposes of investigating a potential common law claim and not simply to investigate the circumstances of an injury;
  • Medical reports – although these may also be subject to the disclosure obligations in the CLWA;
  • Surveillance reports, if they have been obtained in a matter to which the disclosure obligations of the CLWA do not apply, and in anticipation of litigation; and
  • Advices and correspondence with Counsel.

This article was written by Richard Garnett, Partner and Lisa Sherman, Solicitor.

Subscribe to HWL Ebsworth Publications and Events

HWL Ebsworth regularly publishes articles and newsletters to keep our clients up to date on the latest legal developments and what this means for your business.

To receive these updates via email, please complete the subscription form and indicate which areas of law you would like to receive information on.

Contact us