Defences and exceptions to waiver of LPP
If LPP is established, the following may act as defences or exceptions to a potential waiver of LPP:
- joint interest privilege
- common interest privilege.
Joint Interest Privilege
Joint interest privilege occurs where more than one person holds the right to claim LPP. Joint interest privilege is a common law right,1 rather than a defence to waiver. Joint interest privilege is explained in Farrow2 as follows:
Two or more persons may join in communicating with a legal adviser for the purpose of retaining services or obtaining advice. The privilege which protects these communications from disclosure belongs to all the persons who joined in seeking the service or obtaining the advice. The privilege is a joint privilege.3
Parties of a joint interest must have a shared interest, not merely a shared solicitor. Persons sharing the joint interest privilege cannot claim the privilege against one another. Privilege may apply even where only one of the parties to the joint interest claims it. However, express waiver of LPP will only occur when all parties to the joint interest consent to the waiver.
Joint interest privilege will often arise in formal legal relationships, including:4
- joint venturers
- company director and shareholder; and
- trustee and beneficiary.
Common Interest Privilege
Common interest privilege occurs where two or more parties have a mutual interest in a transaction and one party receives legal advice in relation to that transaction and discloses the communications to other parties sharing that mutual interest. Common interest privilege is a defence to waiver of LPP.5
Relationships in which common interest privilege may arise, include:
- liquidator and creditor
- insurer and insured; and
- company and director.6
Importantly, there can be no common interest between a debtor and creditor, opposing litigants or persons who have independent, possibly adverse interests.7
Common interest privilege is not a well developed doctrine; there have been a number of attempts to define the circumstances in which a ‘mutual’ or ‘common’ interest arises between parties. According to Cross on Evidence,8 the relevant inquiry in determining whether a common interest exists between parties is:
… whether the nature of their mutual interest in the context of their relationship is such that the party to whom the documents are passed receives them subject to a duty of confidence which the law will protect in the interests of justice.
Unlike joint interest privilege, express waiver of LPP can occur without the consent of all parties who have the benefit of the privilege.9
6 Farrow Mortgage Services Pty Ltd (In Liq) v Webb (1995) 13 ACLC 1329 at page 612. However, in the subsequent proceedings of Farrow Mortgage Services Pty Ltd (In Liq) v Webb (1996) 39 NSWLR 601 at page 608-9 an alternative reason was given for maintaining the privilege: ‘The privilege attached to legal advice obtained by a company is not lost when the advice is disclosed to its directors but this is not because of their common interest. The company can only manifest its acts and intentions by the actions and declarations of human beings…The directors’ knowledge of the decision to obtain legal advice and the contents of that advice cannot be treated as a disclosure to a party separate from the company itself. The directors receive and act upon this information as the mind and directing will of the company. Accordingly the disclosure involves no waiver of the company’s privilege’.
Last updated: October 16, 2013