Does Legal Professional Privilege Apply to Correspondence with Experts and Draft Expert Reports?

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Legal professional privilege is a rule of both common and statutory law which prevents the compulsory disclosure of confidential communications between a legal adviser and their client.

Under the Uniform Evidence Acts[1] adopted by the Commonwealth, NSW, Victoria, Tasmania, the ACT, and the Northern Territory, a confidential document or communication is protected by legal professional privilege if it was created by a client, lawyer, or any other person for the dominant purpose of the provision of legal advice[2] or for use in litigation[3]. The scope of the privilege extends to all forms of compulsory disclosure (e.g. by court order or under statute), but can be abrogated by statute, for example in relation to serious terrorism offences.

In Queensland, South Australia and Western Australia, legal professional privilege is governed by the common law and has been summarised by the High Court as follows:

“ ….legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings”.[4]

In engaging and working with expert witnesses, various types of communications and documents arise, some of which are subject to legal privilege, and others of which are not. In this blog we consider whether the privilege applies to correspondence with experts and to draft versions of an expert’s report.

Legal professional privilege in relation to briefing, instructions and communications between an expert and legal counsel 

Communications between legal counsel and expert witnesses

When an expert is briefed by legal counsel for the dominant purpose of acquiring legal advice or contemplated litigation (i.e. litigation that is more than a mere possibility), privilege generally applies to the confidential briefing and instructions given to an expert.[5] However, once the expert report is disclosed for the purpose of use in the relevant litigation, there is an implied waiver of privilege in relation to the instructions and briefing if the content of the report has been influenced by the communications.[6]

Beyond the initial instructions and briefing, additional communications between an expert and legal counsel which satisfy the dominant purpose test and which are:

*   Treated confidentiality;
*   Not treated inconsistently with the claim for privilege; and
*   Not required in order to understand the report,

will be privileged.[7]

However, if the content of the expert’s report has been influenced by the communication, privilege will not apply once the expert report is disclosed.[8]

Communications between legal counsel and third party advisers

The Federal Court in Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Limited (No 4)[9] recently provided guidance on communications between legal counsel and third party advisers which take place during the transactional stage of a deal. The Court made clear that documents prepared during the transactional stage such as emails between lawyers and financial advisers and internal emails between financial advisers are not protected by privilege.[10] Whether this would apply to experts who provide advice during the transactional stage of a matter was not determined. However, this strict approach demonstrates that in order for an expert witnesses report to be protected by legal professional privilege, the dominant purpose must be the provision of legal advice or for use in litigation. Transaction related documents which provide commercial related expert advice rather than legal related expert advice may be given the same treatment should the issue come before the courts.

Draft reports

There is conflicting authority on whether or not draft reports are subject to legal professional privilege.

On one line of authority from the Federal Court, draft reports of an expert witness are not subject to legal professional privilege as they are not communications, nor do they expose communications.[11]

However, another line of authority stemming from the NSW Supreme Court provides that, in accordance with s119(b) of the Evidence Act, whether a draft report is subject to privilege depends on the intention behind the creation of the draft report[12]. If the report was created in order to set out the evidence expected to be provided in the final report and in court by the expert, privilege will not apply. However, if the draft report was created in order to communicate the report to legal counsel for consideration and comment, privilege will apply.[13] The court in Sprayworx Pty Ltd v Homag Pty Ltd[14] summarised the rule as follows:

If an expert prepares a draft report, or notes for the report, with the dominant purpose of a draft report (whether the precise draft then prepared by the expert or an intended later draft) being furnished for comment or advice by the lawyer, then it is privileged. If not, it is not”.

Conclusion

Legal professional privilege in relation to documents prepared by expert witnesses and communications between expert witnesses and legal counsel is a complex issue. It requires consideration of the exact document at hand alongside the stage of the dispute before a determination can be made as to whether or not the privilege applies. Legal counsel dealing with expert witnesses should familiarise themselves with the differing rules concerning legal professional privilege and expert witness documentation and communications to ensure that documents intended to be privileged remain so.

[1] Evidence Act 1995 (Cth), Evidence Act 1995 (NSW), Evidence Act 2008 (VIC), Evidence Act 2001 (TAS), Evidence Act 2011 (ACT) and Evidence (National Uniform Legislation Act) (NT).

[2] s118 of the Uniform Evidence Act

[3] s119 of the Uniform Evidence Act

[4] Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49

[5] Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357

[6] Australian Securities and Investments Commission v Southcorp Ltd [2003] FCA 804 at [21]

[7] Asahi Holdings (Aust.) Pty Ltd v Pacific Equity Partners Pty Ltd (No 2) [2014] FCA 48

[8] Sprayworx Pty Ltd v Homag Pty Ltd [2014] NSWSC 833

[9] [2014] FCA 796

[10] Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Limited (No 4) [2014] FCA 796

[11] Australian Securities and Investments Commission v Southcorp Ltd [2003] FCA 804 at [21]

[12] New Cap Reinsurance Corporation Ltd (in Liq) v Renaissance Reinsurance [2007] NSWSC 258 at [30]

[13] Sprayworx Pty Ltd v Homag Pty Ltd [2014] NSWSC 833 citing New Cap Reinsurance Corporation Ltd (in Liq) v Renaissance Reinsurance [2007] NSWSC 258 at [30].

[14] [2014] NSWSC 833

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