Australia: Insurance Alert

Last Updated: 22 January 2008
Article by Robert Samut
Watkins v State of Queensland [2007] Queensland Court Appeal (30 November 2007)

The Facts

Stephen Watkins as litigation guardian for his son, Harrison Watkins, delivered a notice of claim under the Personal Injuries Proceedings Act 2002 (Qld) ("PIPA") on the State of Queensland, ("the State"). He claimed damages for injuries suffered by his son who was born with a spastic quadriplegic form of cerebral palsy at the Nambour Hospital on 9 July 2001. On 23 January 2007 the State denied liability pursuant to section 20(3) PIPA, and offered to settle the claim for "the amount of nil dollars" on the basis of a report prepared by Professor Alistair MacLennan, a Professor of Obstetrics and Gynaecology.

Professor MacLennan's report began by referring to three letters of instruction from the State's solicitors dated 24 August 2006, 22 September 2006 and 20 December 2006. An invoice accompanying his report referred to a 30 minute telephone conversation with the solicitor acting for the State. In his report Professor MacLennan referred to the letters of instruction as being the basis for facts and assumptions on which his report was based. All the facts upon which Professor MacLennan relied were also contained in separate documents sent under cover of the letters of instruction.

Mr Watkins sought disclosure of documents connected with Professor MacLennan's report, including copies of the letters of instruction and a file note of the 30 minute conversation with the State's solicitor ("the file note").

Relevant Sections In PIPA

Section 20 of PIPA requires a respondent to either admit or deny liability and to make an offer of settlement within a certain time. Section 20(3) provides that the offer "must be accompanied by a copy of medical reports...and all other material... in the offeror's possession that may help the person to whom the offer is made make a proper assessment of the offer".

Section 27 of PIPA provides, in part, that a respondent must give a claimant copies of:-

"Reports and other documentary material about the incident alleged to have given rise to the personal injury to which the claim relates";

Section 30 of PIPA provides, in part, that:-

"A party is not obliged to disclose information or documentary material under Division 1 or this Division if the information or documentary material is protected by legal professional privilege ...

However, investigative reports, medical reports and reports relevant to the claimant's rehabilitation must be disclosed even though otherwise protected by legal professional privilege, but they may be disclosed with the omission of passages consisting only of statements of opinion."

Legal Professional Privilege

By way of background, at common law, communications to and from a legal adviser for the dominant purpose of obtaining legal advice and assistance in existing or anticipated litigation are privileged, and are protected from disclosure. Legal professional privilege will also attach to communications between a party's lawyers and third parties where the dominant purpose of these communications is either to obtain legal advice or assistance in existing or anticipated litigation. Legal professional privilege is a substantive common law right which cannot be abrogated by legislation, unless it is done so expressly or by necessary implication. Legal professional privilege may also be waived by the person holding it either expressly or impliedly. Implied waiver may occur when reference is made to otherwise privileged material in a document which has been disclosed in circumstances where it would be unfair to maintain the privilege.

The Decision At First Instance

The issue for the primary judge was whether legal professional privilege, which was assumed to attach to the letters of instruction and the file note, had been lost. The solicitor for the State swore an affidavit that the letters of instruction and her file note were brought into existence for the dominant purpose of anticipated litigation. On that footing the State claimed legal professional privilege in respect of these documents. The primary judge, however, found in favour of Mr Watkins and ordered that the State deliver into his possession the letters of instruction and the file note. She said:-

"In this case, the letters of instruction were referred to by Professor MacLennan as part of the factual basis of his report. In these circumstances it would be unfair not to disclose those documents, and misleading not to disclose the full contents of those documents."

She held that the file note should be disclosed as it revealed further instructions, and the receipt of an oral report which had been reduced to writing. The State appealed.

The Appeal

His Honour Mr Justice Keane gave the leading judgment. He disagreed with the primary judge's reasons for granting Mr Watkins access to the letters of instruction and the file note, but ultimately reached the same conclusion.

He held that the reference to the letters of instruction in Professor MacLennan's report was not enough for legal professional privilege in those letters to be waived. Mr Watkins did not need to refer to those letters to make sense of the report. Disclosure of them was not required as a matter of fairness.

His Honour went on to dismiss the appeal on the basis of his interpretation of the provisions of PIPA. He held that:-

  • PIPA specifically requires that all reports upon which an assessment of liability is formulated be provided to the claimant (s.20(3)).
  • The purpose of PIPA is for unnecessary litigation to be avoided. Professor MacLennan's report was obtained for the purpose of the pre litigation procedures under PIPA, rather than anticipated litigation, and was therefore not privileged.
  • In any event, the qualified preservation of legal professional privilege in section 30 has no application to section 20(3).
  • If a report to which communications relate was never itself the subject of privilege, then those communications can never be the subject of privilege. The effect of section 20 is that the report and letters of instruction were never the subject of privilege, and while the letters of instructions were not required to make sense of Professor MacLennan's report, they were "material that may help the person to whom the offer is made make a proper assessment of the offer" (s.20(3)).

The finding of Keane JA that the qualified preservation of legal professional privilege in s.30 PIPA has no application to s.20(3) PIPA is significant. Justices Jerrard and MacKenzie were compliant in this finding. What this means is that legal professional privilege will not attach to any document required to be disclosed under s.20(3) PIPA. That section requires the disclosure of all material in the offeror's possession that may help the person to which the offer is made make a proper assessment of the offer. A claimant's lawyer would not have to be too creative to fit most significant documents, file notes and recorded observations within such a category. If the reasoning adopted by the Queensland Court of Appeal is applied in other cases could opinion reports of loss assessors, or file notes of conversations with experts taken in lieu of obtaining a written report properly fall within this category of disclosure? That would not seem to be the intention of the legislature, however there is no limitation in s.20(3) as to what documents might "help" a claimant make a proper assessment of the offer.

Insurers and their lawyers will have to consider current practices in light of this decision.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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