The England and Wales Court of Appeal (Civil Division) has recently provided Australian lawyers with a timely reminder that client legal privilege does not extend to communications with third parties, unless those confidential communications are prepared for the dominant purpose of legal advice being provided, or for assisting actual or contemplated litigation.
In the case of Kerman v Akhmedova  EWCA Civ 307, 27 February 2018, the England and Wales Court of Appeal made it clear that a lawyer could not rely on client legal privilege to avoid giving evidence about a client's assets.
In this family law matter, a lawyer, acting for husband engaged in divorce proceedings, was asked to give evidence about his role in arranging insurance for his client's highly valued art collection in order to assist the Court in locating the art collection.
The Court of Appeal held that the lawyer could not invoke client legal privilege in refusing to answer a series of questions as the questions asked of the lawyer were confined to two factual topics relating to (i) the insurance arrangements for the art collection, and (ii) the legal advisor's knowledge of banking arrangements concerning the art collection. The Court of Appeal held that if the husband for whom the lawyer acted for had been asked these questions, he would not have been able to rely on legal advice privilege as a reason for refusing to answer them. Given that client legal privilege is a privilege of the client and not the lawyer, the Court of Appeal held that the lawyer could not rely on a privilege which was not available to his client.
Importantly, the Court of Appeal indicated that the lawyer was not asked about his dealings with his client, his instructions from him, or his communications with him, let alone about any advice he may have given him.
Client legal privilege and third party communications in Australia
In Australia, at common law, legal privilege is known as "legal professional privilege". Under the Evidence Act 1995 (Cth) (Evidence Act), it was renamed "client legal privilege". Broadly, the Evidence Act governs privilege of confidential communications or documents adduced at trial, whereas pre-trial issues of privilege are usually governed by the common law (except to the extent otherwise provided by statute or rules of the court.)
The Evidence Act reflects common law protections which create two types of client legal privilege: advice privilege and litigation privilege.
Advice privilege applies to confidential communications between a lawyer and a client (and between 2 or more lawyers acting for the client), provided those confidential communications were prepared or made for the dominant purpose of the lawyer providing legal advice to the client. Legal advice privilege also extends to confidential documents prepared by a lawyer or third party provided that those documents were also prepared or made for the dominant purpose of the lawyer providing legal advice to the client.1
Litigation privilege applies to confidential communications made or prepared by a client and another person, or between a lawyer acting for the client and another person, that were prepared or made for the dominant purpose of a lawyer providing client legal services relating to existing or contemplated litigation. The contents of confidential documents made for the dominant purpose of existing or contemplated litigation.2
A communication or document must have been made confidentially to obtain privilege. The Evidence Act defines a confidential communication or document as one which was made "under an express or implied obligation not to disclose its contents".3
Dominant purpose test
Both the common law and the Evidence Act require that in order for a confidential communication or document to attract privilege, it must have been made or prepared for the dominant purpose of legal advice or existing or contemplated litigation.4
The "purpose" referred to is the purpose which, at the time, led to the making of the communication or the preparation of the document.5
1 Section 118, Evidence Act 1995 (Cth)
2 Section 119, Evidence Act 1995 (Cth)
3 Section 117, Evidence Act 1995 (Cth)
4 Sections 118 and 119, Evidence Act 1995 (Cth); Esso Australia Resources Limited v The Commissioner of Taxation  HCA 67
5 Carnell v Mann (1998) 159 ALR 647.