Two recent cases highlight that Legal Professional Privilege (LPP) is not something that should simply be taken for granted by employers as automatically applying when commissioning an investigation report. There are criteria that apply in order for LPP to be triggered, which if breached or ignored may mean investigation reports are not protected from being disclosed.
This is a particularly important consideration when engaging a third party to conduct an investigation and when relying on information contained in an investigation report.
What is LPP?
LPP protects certain communications (written or spoken) between lawyers and their clients from being disclosed in court.Only a Court (or similar adjudicating body) can determine whether a claim for privilege can be sustained or not.
What is the test?
When determining whether LPP attaches to a communication or document, a court must consider the dominant purpose for which the communication or document was created. For LPP to apply, a court must be satisfied that the document or communication was created for the purpose of existing or anticipated litigation,1 or for the purpose of seeking legal advice, or both.
According to relevant case law, the purpose for which a document is created is determined at the time it is commissioned. Additionally, the concept of “anticipated litigation” involves the concept that it is more probable than not that such proceedings will be commenced, and that “mere vague apprehension of litigation” is insufficient.2
Recent ruling - Incident report not protected by LPP
In Victorian WorkCover Authority v Asahi Beverages Australia Pty Ltd3, the court rejected the Victorian WorkCover Authority’s (VWA) submission that an investigation report in relation to a worker’s injury was “brought into existence for the dominant purpose of obtaining or providing legal advice in respect of actual, threatened, contemplated or reasonably anticipated litigation”, and ordered that the report be released.
This case involved an employee of J&T Refrigeration Transport Pty Ltd who sustained a crush injury to his hand when attending the premises of Asahi Beverages Australia Pty Ltd. The worker made a claim for workers compensation, and CGU, which was acting as an agent of the VWA, arranged for an independent investigation to be carried out to investigate the circumstances of the claim.
After considering the two investigation reports submitted by the investigator, CGU accepted the worker’s claim.
The VWA then sought an order against Asahi for indemnity against payments made to the worker on behalf of his employer.
During the proceedings, Asahi applied for copies of the two investigation reports commissioned by the VWA.
In considering whether the reports were created for the purpose of anticipated or contemplated litigation, the court noted that the precise purpose for the reports was not clear from the letter commissioning them.
Given that at the time the reports were commissioned, liability for payment of compensation had not been accepted, the court ruled that the first and most significant matter at the time the reports were commissioned was to determine whether the application for workers’ compensation should be accepted. Accordingly, it could not be said that the potential litigation was the “dominant purpose” for commissioning the reports.
Waiver of LPP
Generally, an employer will be considered to have waived LPP where their conduct is “inconsistent” with maintaining that privilege. This principle is articulated in Mann v Carnell4 where a majority of the High Court stated:
“What brings about the waiver is inconsistency, which the courts, where necessary informed by the consideration of fairness, perceive, between the conduct of the client and the maintenance of the confidentiality; not some overriding principle of fairness operating at large.”
There is no general rule as to whether a statement which reveals the contents of legal advice has the effect of waiving privilege. Whether a disclosure of legal advice amounts to a waiver of privilege depends on the circumstances of the case and, in particular, whether the disclosure is inconsistent with the confidentiality which the privilege aims to protect.
Recent ruling - LPP over investigation report waived
In the recent case of Bartolo v Doutta Galla Aged Services Ltd5 an employee, who had commenced adverse action proceedings under the Fair Work Act 2009 (Cth), was successful in obtaining an order for his previous employer to disclose a confidential investigation report.
The Board of the employer had instructed an independent law firm to investigate allegations concerning the employee and provide an investigation report. After reviewing the investigation report, which contained factual findings and advice relating to allegations against the employee, the Board made a recommendation to the CEO that the employee be dismissed. The CEO terminated the employee on the basis of the Board’s recommendation, without viewing the investigation report.
The employee commenced proceedings against the employer claiming adverse action, in that his employment was terminated because he exercised a workplace right. In response to this claim, the employer asserted that the CEO made the decision to terminate his employment on the recommendation of the Board, which had taken into account an investigation report that was completed by external lawyers.
In determining the employee’s application for access to the investigation report, the court found that the report was subject to LPP, as the dominant purpose was the obtaining of legal advice.
However, the court found on the basis of the principles in Mann that the Board had waived privilege over the investigation report. It was determined that the Board must have relied on the investigation report to make its recommendation to the CEO and this was relevant to the CEO’s state of mind at the time that he terminated the employee’s employment. The court ruled that it would be unfair not to disclose the investigation report to the employee, as the involvement of the Board in the decision to terminate the employee’s employment was in issue.
Tips for employers
Prior to commissioning an investigation report, employers should give consideration to the purpose and legal basis for that investigation. In order to maintain LPP over an investigation report, the “dominant purpose” for that communication to be created must be the provision of legal advice and/or the reasonable probability or likelihood of existing or anticipated litigation.
Employers should always seek advice about disclosing legal advice they have received to other people, giving particular consideration to the genesis, nature and purpose of the information that might lead to a claim of privilege being defeated. In some circumstances, it might even be beneficial to deliberately waive privilege ie disclosing a favourable expert report.