Privilege and disciplinary investigations

Lawyers have an obligation proactively to assert and protect the privilege enjoyed by their clients and former clients: Re Stanhill Consolidated Ltd [1967] VR 749 at 752. I wrote about it in this post about the Legal Profession Act 2004 (Vic).  Lawyers have no implied or, I would suggest, ostensible authority to waive privilege belonging to former clients. The administration of justice will protect the privilege of persons who are unaware of the issue arising and make no assertion of the privilege: Legal Services Board v Garde-Wilson [2007] VCAT 1406 at [89].

In investigations of complaints by former clients about their former lawyers, no privilege issue arises, either under the Legal Profession Act 2004 or the Legal Profession Uniform Law.  The complaint would amount to an implied waiver at common law, and the question is put beyond doubt by statute.  Of course, this proposition has its limits and the wholesale use of client secrets against them in a manner disproportionate to the need to divulge them in response to their complaint is a seriously ugly look.  The issue of client privilege arises where disciplinary investigators are investigating complaints by non-clients, or in own motion investigations.  So, for example, I am advising in relation to a complaint made by the husband about conduct by the wife’s solicitors in a matrimonial proceeding between them.

Where a lawyer purports to waive a former client’s privilege without the client’s instructions, or simply fails to consider the question before handing documents over to the State, the law requires ‘the cat to be put back in the bag’ as far as possible: B v Auckland District Law Society [2003] UKPC 38 at [69]; British American Tobacco Australia Services Limited v Cowell [2002] VSCA 197 at [192].  So a disciplinary tribunal might well not receive, or put from its mind, evidence of privileged communications obtained by legal regulators in the course of investigations of non-client complaints where the client had not waived privilege, and indeed exactly that occurred in a VCAT case in which I was involved.

The law in relation to privilege and non-client complaints under the Legal Profession Act 2004 was clearly declared by VCAT.  The situation faced by  lawyers investigated under the LPUL following the complaints of non-clients, and in own motion investigations, in respect of pre-LPUL conduct is not so clear.  It is the subject of this post, which suggests that notwithstanding what the Legal Services Commissioner will tell you is a clear abrogation of privilege by the LPUL for all investigations conducted under it, lawyers in such circumstances should think carefully before giving up privileged communications without their former clients’ informed consent.  They should, in my submission, at least alert their clients to the possibility that the privilege might still be available to be asserted and give them the opportunity to assert it, if they care to sufficiently.

It will be increasingly important in the future to make clients aware that lawyer-client confidentiality has been largely done away with: all a person curious about the advice being obtained by his adversary need do is make a complaint about the adversary’s lawyer.  The old advice that ‘everything you tell me is strictly confidential’ cannot now be given without risking a negligence suit. Every time a solicitor tells a battered woman that whatever she tells him will be just between her and him, and he will seek her permission before using the information publicly or even in the Family Court, will have to add ‘unless your boyfriend or his father or a men’s rights action group make a disciplinary complaint against me, as they are perfectly entitled to do’.  So too the QC representing BHP in relation to tax matters: ‘Of course you understand that all this is privileged (unless the judge, who’s getting pretty cranky at me, refers me off for investigation by the Legal Services Commissioner)’.  I don’t think I’m being hyperbolic; I’m acting at this very moment for a solicitor whom the Commissioner is compelling to divulge privileged communications connected with the subject of proceedings, in a complaint by the other side to the proceedings, mid-proceedings.

It is a not infrequent incident of my practice that I am instructed that lawyer clients have assumed that the Legal Services Commissioner had the power to compel them to produce former clients’ files, and have not stopped to think about the question of privilege, even though the disciplinary complaint has been lodged by a stranger to the solicitor-client relationship.  As far as I can tell, the Commissioner often seeks production of entire files even where the need for the file, or the whole file, is questionable, and even where those files are probably privileged.

It was positively mischievous for the Commissioner to compel lawyers to produce their former clients’ files in investigations governed by the Legal Profession Act 2004 in response to complaints by persons other than the clients.  For investigations under the Legal Profession Uniform Law, the mischief is less obvious.  That is because s. 466(2) of the LPUL says a lawyer must produce privileged communications upon demand by a disciplinary investigator, a clearer abrogation of the privilege than was present under the Legal Profession Act 2004.  Two questions arise:

  • First, does s. 466(2) refer only to communications of which the client is the owner of the privilege, or to communications where the solicitor herself is the owner of the privilege? I think there is a good argument that advice I give a solicitor under investigation by the Commissioner could not be required by the Commissioner to be produced: there are insufficiently clear words to justify a construction which would so grievously interfere with the solicitor’s fundamental common law rights: Daniels Corporation International Pty Ltd v ACCC [2002] HCA 49;  (2002) 213 CLR 543 [9], [11].  There is a good reason for busting through client privilege when investigating solicitors: otherwise the investigation would be hampered by a problem peculiar to solicitors.  But there is no reason why lawyers and doctors should be treated so differently in relation to privilege over the advice they receive from their own lawyers in disciplinary investigations.
  • Secondly, does s. 466(2) apply, without modification, in the case of investigations about pre-LPUL conduct carried out under the LPUL? Many investigations under LPUL now and for a long time to come are and will be in respect of, or partly in respect of, pre-LPUL conduct.   The transitional provisions in schedule 4, cl. 27 say that pre-LPUL conduct may be investigated under the LPUL (‘with the necessary modifications’) if the complaint is first made after LPUL’s commencement, but ‘disciplinary action may not be taken against a person under this Law in relation to the conduct if it is more onerous than the disciplinary action that could have been taken against the person under the old legislation in relation to the conduct’.

This raises more questions.  Is it necessary because of the presumption against non-retrospectivity to modify s. 466(2) so that in the investigation of complaints by non-clients, privilege cannot be busted through in relation to communications made between clients and lawyers at a time when it was thought that the privilege was secure? What is ‘disciplinary action’?  And ‘onerous’ to whom?

‘Disciplinary action’ is not defined in the LPUL. But from s. 66, one can see that ‘disciplinary proceedings’ are only an example of ‘disciplinary action’: it speaks of a person being ‘the subject of disciplinary proceedings, or other disciplinary action’.  From s. 202 one can see that investigation by the Legal Services Commissioner is a form of ‘disciplinary action’ because it provides for the Costs Court to refer suspected misconduct to the Commissioner for investigation.  Section 207 is about ‘disciplinary action’ but is not exclusively about disciplinary prosecutions. And cl. 27 itself is not primarily about disciplinary prosecution, but is about disciplinary investigations; it is even headed ‘Complaints and investigations under this Law of prior conduct’.

Accepting for the purposes of argument that ‘to take disciplinary action’ includes action taken during a disciplinary investigation, the further question ‘more onerous to whom?’ arises.  A disciplinary investigation which requires the production at the behest of a stranger to the solicitor-client relationship of communications given under the understanding that they were truly protected from disclosure is obviously more onerous to the former client. It exposes confidences protected by an ancient privilege to the Commissioner’s scrutiny, his investigator’s scrutiny, his staff’s scrutiny, the scrutiny of counsel briefed to advise and subsequently to the glare of public disciplinary prosecution, the publication of reasons on the internet, and the Commissioner’s new-found penchant for editorialising about recent cases on his website (which annoyed a lawyer sufficiently to sue him for defamation the other day, albeit unsuccessfully).

I have seen the Commissioner promise not to divulge privileged communications obtained under compulsion to the non-client complainant, but that is followed by a reservation of what are said to be rights to use the privileged communications in any (public) disciplinary prosecution, and no enthusiasm for agreeing in advance to a confidentiality regime within the disciplinary prosecution.

All this puts practitioners in a difficult position: obliged pro-actively to identify and assert past clients’ entitlement to assert client-legal privilege, and at risk of prosecution for professional misconduct if they do not perform their obligation satisfactorily, and yet at risk of a misconduct prosecution for not complying with a statutory compulsion if they do not deliver up.  Indeed, failure to comply with a requirement to produce documents under LPUL s. 371 is a criminal offence.  This is a question for the Law Institute of Victoria, Law Society of NSW, and the Victorian and NSW Bars to take up.  If you have had an experience relating to this issue with a regulator in your state or territory, please let me know about it.


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One Reply to “Privilege and disciplinary investigations”

  1. When our conduct Board sought privileged material of my client at the behest of my client’s opponent in litigation I successfully injuncted them from disclosing the material to the third party without notice. see FINLAYSON & ORS v LEGAL PRACTITIONERS CONDUCT BOARD & ANOR [2012] SASC 77

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