Australia: Cartel Confessions: The Gift That Keeps On Giving?

Key Points

  • The Court said that filed statements of evidence (which contained information arising from the ACCC's cartel leniency policy) are not privileged.
  • This should not deter companies from taking advantage of the leniency policy.

The Full Federal Court has held in ACCC v Cadbury Schweppes [2009] FCAFC 32 that the ACCC could not claim legal professional privilege over a number of witness statements (which it held as a consequence of its investigation into the Visy-Amcor cartel operation between 1999-2004), as it had filed and served those documents on its opponent, Visy, in earlier proceedings.

As those documents came into existence as a result of information provided under the ACCC's cartel leniency policy, does that mean companies should hesitate in taking advantage of the ACCC's leniency policy?


Cadbury Schweppes sought to recover damages for loss it had suffered as a result of the cartel conduct engaged in by Visy, which had been the subject of a successful ACCC prosecution in December 2005 (Visy Proceedings).

Cadbury Schweppes sought access to 111 finalised proofs of evidence, which had been prepared, filed and served by the ACCC on Visy under an order of Justice Heerey in the Visy Proceedings. Under the terms of Justice Heerey's order in the Visy Proceedings, the proofs of evidence were subject to "the same implied undertaking as to confidentiality as applies to a document produced upon discovery". None of the finalised proofs of evidence was expressly claimed to be confidential in its entirety, other than in so far as the "implied undertaking as to confidentiality" in Justice Heerey's order operated.

In the Visy Proceedings, the 111 finalised proofs of evidence were never read into evidence, as the parties agreed to the facts and Justice Heerey made his decision on that basis. It is important to note that the documents in question were finalised witness statements intended to be given as evidence in court, and would have been available on the public record, had not the parties agreed to the facts and received judgment on that basis.

Justice Gordon held that the ACCC had waived any legal professional privilege it had in relation to those 111 documents. The ACCC appealed the decision as an intervening party. Leave to appeal was granted, and the appeal was heard by the Full Federal Court.

The Decision

The Court considered that there were two main issues for it to address:

  • whether the finalised proofs of evidence prepared, served and filed by the ACCC on Visy were subject to legal professional privilege (specifically, litigation privilege); and
  • whether the act of filing and serving the finalised proofs of evidence constituted a waiver of legal professional privilege, and if so, to what extent.

In relation to the issue of litigation privilege, the Court held that it was impossible for the privilege to attach to the finalised proofs of evidence, given that they had been prepared for the purpose of serving them on Visy, the ACCC's opponent in those proceedings. The ACCC did not attempt to impose any further restriction on the use Visy could make of the documents, other than the "implied undertaking as to confidentiality" under Justice Heerey's order.

In relation to the question of issue waiver, the Court found that as the subject matter of the appeal was the finalised proofs of evidence held by Visy (and not, for example, copies of them held by the ACCC), the question of issue waiver does not arise. Nonetheless, the Court found that the ACCC's conduct in filing and serving the documents on their opponent Visy constituted a complete waiver of any privilege that may have existed.

The Court held that the ACCC's claim that the documents were the subject of legal professional privilege could not be maintained. The Full Federal Court dismissed the appeal.


Does this mean that companies should think twice about going to the ACCC under its leniency policy?

No. The implication of this decision is that evidence and documents provided to the ACCC in one set of proceedings may later be used in another set of proceedings initiated by a third party. However, there is nothing new about this. It has always been the case that a party admitting to cartel conduct in order to take advantage of the ACCC's leniency policy could potentially face third party actions for damages in the future. The ACCC will almost always use a confession under the leniency policy in enforcement proceedings against another cartel participant - that is the whole point of offering leniency.

While leniency applicants need to be aware that this case has confirmed that certain documents such as proofs of evidence may be obtainable in follow-on damages cases, this decision does not necessarily mean that companies should not take advantage of the ACCC's leniency policy. The principal benefit to be obtained by a cartel participant under the leniency policy is immunity from ACCC enforcement. Given that cartel conduct is likely to be criminalised in the near future, the benefits associated with obtaining immunity from prosecution can outweigh the potential risk of facing third party actions for damages.

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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