High Court confirms legal professional privilege is a shield, not a sword

Legal professional privilege is a shield, not a sword; 'an immunity from the exercise of powers which would otherwise compel the disclosure of privileged communications'1 and not a 'legal right which is capable of being enforced' that may 'found a cause of action'.2

That is the summary of the High Court of Australia's decision in Glencore International AG & Ors v Commissioner of Taxation of the Commonwealth of Australia & Ors [2019] HCA 26 (Decision) in which multinational commodity trader and miner, Glencore, failed to have legally privileged documents, that came into the hands of the Australian Taxation Office (ATO), returned to Glencore and not relied upon.

The key legal question for the court was to determine whether a regulator, like the Commissioner of Taxation, could use privileged material that had been distributed into the public by a third party.

Facts The plaintiffs were four companies in the global Glencore group. In around October 2014, the plaintiffs' Australian lawyers engaged an incorporated law practice in Bermuda, Appleby (Bermuda) Limited (Appleby), to provide legal advice on a corporate restructure of Australian entities within the Glencore group. The resulting legally privileged documents were then stolen (Glencore documents) from the electronic file management system of Appleby amongst the documents colloquially...