ASIC has released Information Sheet 165 Claims of legal professional privilege (Information Sheet) today which sets out ASIC’s approach to claims of legal professional privilege (LPP). The most significant, and new, aspect of the Information Sheet is its discussion concerning the voluntary disclosure of LPP information to ASIC on a confidential basis.

LPP is a right that clients have entitling them to refuse to produce legal advice to a regulator or to an opposing party in litigation. This right is important in the context of, for instance, internal investigations, in the course of which a client may seek advice from a lawyer as to its potential legal exposure. A client’s position may be prejudiced if it is obliged to produce such advice.

The attitude of ASIC, and its predecessor regulators, with respect to LPP has changed over the years. Prior to the 2002 High Court Daniels v ACCC decision, ASIC took the approach that it could obtain privileged documents directly from a client where a lawyer claimed privilege over those documents on behalf of the client. In Daniels the High Court held that LPP is an important right or immunity, entitling a party to withhold from production legal advice that the party has obtained. Since Daniels, ASIC has accepted that LPP also applies to documents that it seeks under compulsion. 

The Information Sheet seeks to settle ASIC’s position about LPP. It contains eight sections dealing with particular aspects of LPP, including:

  1. For LPP claims over information in documents: ASIC expects a claim to be accompanied by a schedule which (amongst other things) individually itemises the information in each document over which LPP is claimed and sets out details of the names of all authors and recipients of the document together with their employer and position (if any), and states the category of LPP claimed (advice privilege or litigation privilege) and the identity of all persons who claim the right to privilege.
  2. For LPP claims over oral information (such as that given under section 19 of the ASIC Act): ASIC expects to be provided with information including the names of all parties who communicated the information or to whom the information has been communicated together with their positions and employer (if any), the category of information claimed, and whether the information is recorded in part of in whole in tangible form.
  3. Voluntary confidential disclosure of LPP information: ASIC has developed a standard agreement for where a person may wish to allow ASIC to access privileged material. Under the agreement, ASIC and the privilege holder agree that the disclosure to ASIC does not constitute waiver. The agreement would still allow ASIC to seek to use the privileged document in evidence in a proceeding to challenge the claim for privilege or in a criminal proceeding in respect of the falsity of a statement made by the privilege holder.

It is important to bear in mind that while ASIC’s proposed agreement for voluntary disclosure prevents ASIC from asserting that the provision of the privileged information constitutes a waiver of privilege, the agreement cannot prevent third parties from asserting that privilege has been waived. This is a significant risk to be considered, especially given that it is common for plaintiffs in class actions to subpoena ASIC for documents obtained in the course of its investigations. Unfortunately, the law is unclear as to whether the voluntary provision of legal advice to a regulator amounts to a general waiver of privilege, even if that production occurs on a confidential basis. An assessment of all the relevant facts and circumstances is necessary in order to determine whether such a general waiver has occurred.

Key message

You should seek legal advice in relation to any documents potentially subject to LPP which may be sought by ASIC or other regulators. Further, before you enter into a confidentiality agreement of the kind proposed by ASIC, and produce your privileged materials to the regulator, you should seek legal advice about the risks associated with that course, and the measures that can be taken to mitigate that risk.