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Legal Professional Privilege- Sword or Shield?

There have been some recent comments by the High Court of Australia in relation to legal professional privilege. In August 2019 the High Court handed down the decision in Glencore International AG & Ors v Commissioner of Taxation [2019] HCA 26.  The decision concerned whether the Glencore Group of companies could obtain an injunction restraining the Australian Taxation Office (“ATO”) from using certain documents on the grounds of legal professional privilege. 

The key legal question for the High Court was to determine whether the ATO could use privileged material that had been distributed into the public by a third party.

The plaintiffs were four companies in the global Glencore Group.  In October 2014 the plaintiffs’ Australian lawyers engaged Appleby Limited, an incorporated law practice in Bermuda, to provide legal advice on a corporate restructure of the Australian entities within the Glencore Group.  The legally privileged documents were subsequently stolen from the electronic file management system of Appleby, disseminated to the public and given global media coverage.

The ATO obtained copies of the stolen documents.  After becoming aware that the document were in the ATO’s possession, the plaintiffs asserted that those documents were created for the sole or dominant purpose of Appleby providing legal advice to the plaintiffs and subject to legal professional privilege.

Glencore brought proceedings seeking an injunction restraining the ATO’s use of the documents.

The High Court held that legal professional privilege is a shield, not a sword.  In this case it meant that legal professional privilege could not be relied upon by Glencore as a legal right which was capable of being enforced and creating a cause of action which required the ATO to be subject to injunctions or deliver the documents.  Glencore did not have any actionable legal right. 

The decision clarifies that legal professional privilege operates as a means of defensively resisting the compulsory production of information, but does not provide a positive right entitling a party to remedy, such as injunction restraining the use of legally privileged material. The Court reiterated that the parties may be able to rely upon the confidential nature of legally privileged material to obtain an injunction to restrain a breach of an obligation of confidentiality and protection of material, however that avenue was not available to Glencore given that the documents were in the public domain.

Liability limited by a scheme approved under the Professional Standard Legislation

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