Australia: Legal professional privilege - are all pre-litigation investigations privileged?
Building and construction update

It is a well known fact that prior to litigation commencing, parties should do all they can to get their 'ducks in a row'.  It is often assumed that pre-litigation investigation reports are protected from disclosure down the track due to legal professional privilege. 

A recent case in Victoria is a good reminder that this is not always the case as privilege can only be successfully maintained in circumstances where any such report or investigation was obtained for the dominant purpose of either:

1. providing legal advice; and/or

2. using the report in anticipated legal proceedings.

The case of Perry & Anor v. Powercor Australia Limited [2011] VSC 308 is a recent example where certain pre-litigation investigation reports were not protected by legal professional privilege.  In this case investigation reports that were commissioned by Powercor's in-house lawyer were ordered by Justice Robson to be disclosed.

The case related to investigation reports that were obtained by Powercor following the Victorian bushfires in February 2009.  Powercor, through its in-house lawyer, commissioned investigation reports into the cause of the fire (as there were allegations that Powercor's faulty power facilities caused the fire).  Litigation followed soon after those reports had been commissioned and during the course of that litigation, Powercor claimed privilege over the investigation reports it had obtained prior to the commencement of litigation, which was challenged by the plaintiffs. 

Significantly, Powercor's CEO, who allegedly asked Powercor's in-house solicitor to arrange for an investigation that gave rise to one of the reports, did not give any evidence.  His failure to give evidence (in circumstances where it was central to the establishment of privilege) led the Court to draw the inference that his evidence would not have assisted Powercor's claim to privilege.¹

The Judge found that there were many different purposes but no 'dominant purpose' behind the commissioning of the reports.  Some of the purposes included – to comply with statutory reporting requirements; to provide information to an insurer; and internal reporting.  The Court concluded that there had not been a dominant purpose for obtaining the reports (either for legal advice and/or use in anticipated litigation). 

This decision is a timely reminder for lawyers and professionals involved in pre-litigation investigations and audits of the need to clearly separate, distinguish and establish the purpose for the commissioning of such reports, and satisfy the requirements of the Evidence Act.

Footnotes

1. Jones v Dunkel (1959) 101 CLR 298

This report does not comprise legal advice and neither Gadens Lawyers nor the authors accept any responsibility for it.