In the recent decision of Ensham Resources Pty Limited v AIOI Insurance Company Limited  FCA 710, the Federal Court of Australia dismissed an interlocutory application brought by an insured seeking orders that its insurer produce certain reports prepared by a loss adjuster. The insured also sought access to the reports which effectively required an order that they not be subject to legal professional privilege.
The insurer’s lawyers had claimed privilege by replacing the retainer for the loss adjuster, previously provided by the insurer, with that of the lawyers. The Court applied two tests to determine whether privilege would attach to the reports which included:
Whether litigation was reasonably contemplated; and
Whether the documents were prepared for the dominant purpose of providing advice or assistance in relation to anticipated proceedings.
On the first point, the Court was clear that just because an insurance company may be accustomed to litigation, or the matter may one day involve lawyers, did not automatically mean that privilege could be claimed for those documents. The test was objective, namely whether a person in the position of the relevant solicitor would reasonably anticipate litigation. This went beyond the mere possibility it happening.
The second point required the Court to ascertain the state of the mind of the lawyer and whether, viewed objectively, it could be considered that the material came into being where litigation was reasonably anticipated or contemplated. The “dominant purpose” required priority over any other purpose.
The Court considered that by the time the various reports in the series were being prepared, there was a real prospect of litigation and this had been identified by the insurer’s lawyers. It was noted that by the time the lawyer provided instructions to the assessor, there was a real prospect of litigation.
The circumstances in which the reports came into existence were believed by the Court to have been of the kind that human experience would recognise as being reasonably conducive to litigation and the contents and the subject matter of the reports were considered matters that would generally be relevant to a contentious issue in the proceedings.
The Court accordingly dismissed the insured’s application.
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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