We have previously written about the interplay between legal professional privilege (LPP) and regulator driven matters. Links to our articles:
The vexed question of privilege – Optus loses bid to keep Deloitte report under wraps: https://www.khq.com.au/blog/2023/11/22/optus-deloitte-report-not-privileged/
Privilege waived for documents voluntarily disclosed to ASIC: https://www.khq.com.au/blog/2024/04/24/federal-court-rules-waiver-of-privilege/
To recap:
- The government has released a discussion paper, largely seeking to strengthen regulators’ position to claw back LPP.
- The Federal Court held that Noumi waived privilege in disclosing the PwC Report to ASIC under a Voluntary Disclosure Agreement (VDA) (the Noumi Decision).
Arguably, the privilege pendulum has been swinging towards the regulators.
That is until late last year when the Full Court of the Federal Court overturned the Noumi Decision and held that disclosing documents to PwC under the VDA did not constitute a waiver of an otherwise privileged document.
While the VDA under which the report was provided allowed ASIC to identify investigative leads or potential witnesses, the Full Court found that such investigations alone did not, in themselves, constitute a disclosure of the information contained in the PwC Report.
The Noumi Decision means that entities can produce documents to a regulator under an agreed disclosure regime with a degree of comfort that they will not be deemed to have waived LPP. This is important because the concern for waiver can otherwise impede compliance with production orders. It’s a win for the entity and ASIC because the investigation can continue without compromising the target. Not everyone necessarily wins though, as in this case, where a third party (former director) was seeking to get access to the otherwise protected documents. As with any matters of this kind, there will be a degree of context that cannot be ignored. Even still, the big picture is slightly clearer.
The lessons in our original article (namely that privilege holders should act consistently with maintaining confidentiality, and seek legal advice before disclosing any privileged documents) remain highly relevant. The Court’s reluctance to dispense with LPP in this instance further emphasises the importance of having a lawyer oversee investigations where there is potential for litigation down the track.
