Professional Liability Guide

PROFESSIONAL LIABILITY GUIDE

CHAPTER 17 – COMMON INTEREST PRIVILEGE

Legal professional privilege and waiver Confidential communications between a client and the client’s legal adviser are privileged if made for the dominant purpose of giving confidential legal advice (whether connected with litigation or not) or for use in existing or anticipated litigation. This privilege, which is that of the client, exists at common law (and now under relevant statutes) ‘ to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers ’. 640 Generally, if a document subject to legal professional privilege is given to someone else so that the content ceases to be confidential, the privilege is lost. This is because the act of giving the document to a third party is, in the circumstances, inconsistent with any continuing intention to maintain confidentiality. 641 It amounts to a ‘ waiver ’ of the privilege and any associated rights.

Referencing the privileged communication is not sufficient to waive privilege. There must be reliance on the content of the privileged communication. 642

One exception to the waiver arises where the person entitled to the privilege and the person to whom the disclosure is made have such a commonality of interest in relation to the subject matter of the privilege that sharing of the content is consistent, rather than inconsistent, with an ongoing intention to preserve confidentiality and privilege. 643

This exception is known as common interest privilege . 644

Common interest privilege is recognised both at common law and under statute 645 and bears relevance to insurers and insureds sharing information in the insurance claims context.

Establishing a common interest The relationship between the insured and their insurer evolves throughout a matter. At the stage where indemnity is being considered, the insured’s interest is to be afforded cover while the insurer is interested in its position under the policy and whether it should extend or decline cover. In these circumstances, it could not be said that the insured and insurer have a commonality of interest that would invoke the common interest privilege. Once indemnity has been confirmed, the respective interests of the insurer and insured become aligned. Both parties are interested in defending the claim; therefore, it follows that in sharing any confidential legal advice, the parties are not intending to forfeit any legal professional privilege. Courts have acknowledged that common interest privilege is not a ‘ rigidly defined concept ’. 646 Whether an insured and insurer will have the requisite common interest will be assessed on a case-by-case basis by reference to the surrounding circumstances. 640 Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49, 64 (Gleeson CJ, Gaudron and Gummow JJ) . 641 Mann v Carnell (1999) 201 CLR 1. 642 In the matter of Austral Bronze Pty Ltd [2020] NSWSC 1491 from Hastie Group Ltd (in Liq) v Moore (t/as Deloitte Touche Tohmatsu) (2016) 339 ALR 635 [53]. 643 Marshall v Prescott [2013] NSWCA 152 [57]. 644 Michael Durrant, ‘Legal professional privilege: a comment’, (2006) AMPLA Yearbook 306, 307. 645 Evidence Act 1995 (Cth) s 122(5)(c). 646 Farrow Mortgage Services Pty Ltd v Webb (1996) 39 NSWLR 601, 609.

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