LPP element 2: professional relationship and independence
For LPP to attach, the confidential communication must generally be between a legal adviser and client. The court has identified two elements to establish whether a person is to be considered a ‘legal advisor’:1
- the individual must be acting in the capacity of a lawyer and not in some other capacity; and
- the advice must be of an ‘independent character notwithstanding the employment’.2
Traditionally, LPP was only available to communications between a solicitor in private practice and their client.3 However, in Waterford4 it was held that LPP may protect communications between a government department or statutory authority and their salaried legal advisors, so long as there is ‘a professional relationship which secures to the advice an independent character notwithstanding the employment’.5 LPP may also attach to confidential communications between corporate in-house solicitors and their private sector employers.6
Capacity
LPP will only attach to communications where the legal advisor is:
- appropriately qualified; and
- acting in their capacity as a lawyer and not in some other capacity.
The question of whether a legal advisor if appropriately qualified can generally be established by proof of the legal adviser's admission to practice as a barrister or solicitor.
In the modern government and corporate context, a lawyer may be appointed to a position requiring both legal and other work. In those circumstances, the privilege will only attach to communications made in the capacity of a legal advisor that satisfy all elements of LPP. A job title such as ‘General Counsel’, ‘Principal Legal Officer’ or ‘Chief Legal Officer’, which highlights the legal position, is informative (but not determinative) that the lawyer is acting in the capacity of a legal advisor.7 On the other hand a job title that does not suggest any legal position would ‘immediately call into question’ whether the individual acts in the capacity of a lawyer.8
The court has also recognised that in-house lawyers may be involved in providing legal advice as well as advice of a commercial nature. In these cases, ‘the privilege should not be denied simply on the basis of some commercial involvement’ and so whether LPP attaches to communications will be determined according to the dominant purpose for which the communications came into existence.9
Independence
LPP will only attach to communications where the legal advisor acts independently of the employer. To be considered to act independently, the ‘personal loyalties, duties and interests’ of the in-house lawyer to his or her employer must be severable from the provision of legal advice.10 While independence must be determined on a case-by-case basis,11 the following factors may indicate independence:
Practicing certificate
Admission as a lawyer evidenced by a practicing certificate substantiates the lawyer’s duty to the court and obligation to uphold certain standards of conduct, irrespective of the employment. Holding a current practicing certificate is informative but not determinative of independence.12 Notably, a salaried government legal officer engaged in legal work is not required to hold a practicing certificate under the Legal Profession Act 2007 (Qld).
Reporting lines
Where an in-house lawyer reports directly to a board of directors or a managing director, for example, the legal advice is more likely to be considered independent.13
Remuneration
Where an in-house lawyer’s remuneration is dependant upon the performance of the business unit or company then the lawyer may not be considered to be acting independently of the employer because the lawyer is involved in the business of the company. Where an in-house lawyer holds shares in the company a similar conclusion may be reached.14
Employment contract—independence clause
An independence clause in an in-house solicitor’s employment contract is informative but not determinative of the lawyer’s independence from the employer. Independence clauses recognise the lawyer’s overarching duty to the court and obligation to maintain a certain standard of conduct.15
Directors
Despite any legal qualifications, Directors cannot provide independent legal advice to a company because the Director is the ‘mind’ of the company and cannot advise itself.16
1 Re Proudfoot and Human Rights and Equal Opportunity Commission (1992) 28 ALD 734 at 740; Aquila Coal Pty Ltd v Bowen Central Coal Pty Ltd [2013] QSC 82 (Aquila); Southern Equities Corporation (in liq) v Arthur Andersen & Co (No 6) [2001] SASC 398 at paragraph 8.
2 Waterford v Commonwealth of Australia (1987) 163 CLR 54 at page 62.
3 The rationale for extending LPP to salaried legal officers and in-house counsel was explained by Lord Denning MR in Alfred Crompton Amusement Machines Ltd. v Customs & Excise Commissioners (No.2) [1972] 2 Q.B. 102 at page 129: ‘The law relating to discovery was developed by the Chancery Courts in the first half of the 19th century. At that time nearly all legal advisers were in independent practice on their own account. Nowadays it is very different. Many barristers and solicitors are employed as legal advisers, whole time, by a single employer. Sometimes the employer is a great commercial concern. At other times it is a government department or a local authority. It may even be the government itself, like the Treasury Solicitor and his staff. In every case these legal advisers do legal work for their employer and for no one else. They are paid, not by fees for each piece of work, but by a fixed annual salary. They are, no doubt, servants or agents of the employer [...] They are regarded by the law as in every respect in the same position as those who practise on their own account. The only difference is that they act for one client only, and not for several clients. They must uphold the same standards of honour and of etiquette. They are subject to the same duties to their client and to the court. They must respect the same confidences. They and their clients have the same privileges’.
4 Waterford v Commonwealth of Australia (1987) 163 CLR 54.
5 Waterford v Commonwealth of Australia (1987) 163 CLR 54 at page 62.
6 The Attorney-General for the Northern Territory v Kearney (1985) 158 CLR 500 at page 510 per Gibbs CJ; Waterford v Commonwealth of Australia (1987) 163 CLR 54 at pages 78-82 and 95-96.
7 Emilios Kyrou ‘Legal professional privilege for general counsel wearing two hats’ (2000) 38(5) Law Society Journal 42.
8 Southern Equities Corporation (in liq) v Arthur Andersen & Co (No 6) [2001] SASC 398 at paragraph 20.
9 Seven Network Limited v News Limited [2005] FCA 778 at paragraph 31.
10 Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts (No 2) [2007] FCA 1445 at paragraph 35. See also Rich v Harrington [2007] FCA 1987 at paragraph 57.
11 Waterford v Commonwealth of Australia (1987) 163 CLR 54 at page 62.
12 Aquila affirming Vance v McCormack (in his capacity as Chief of Air Force) and Another [2004] ACTSC 85. Boddice J also commented in Aquila: 'A conclusion that legal professional privilege can attach to the documents in question, notwithstanding that the defendant's general counsel is not admitted as a legal practitioner in Australia, is consistent with the purpose of, and rationale behind, the doctrine of legal professional privilege' (at paragraph 24).
13 Emilios Kyrou ‘Legal professional privilege for general counsel wearing two hats’ (2000) 38(5) Law Society Journal 42.
14 Emilios Kyrou ‘Legal professional privilege for general counsel wearing two hats’ (2000) 38(5) Law Society Journal 42.
15 Emilios Kyrou ‘Legal professional privilege for general counsel wearing two hats’ (2000) 38(5) Law Society Journal 42.
16 Southern Equities Corporation (in liq) v Arthur Andersen & Co (No 6) [2001] SASC 398 at paragraph 22; Emilios Kyrou ‘Legal professional privilege for general counsel wearing two hats’ (2000) 38(5) Law Society Journal 42.
Last updated: October 16, 2013