Legal professional privilege and without prejudice privilege – some unusual exceptions

Privilege and confidentiality

It is common to think of legal advice prepared by your lawyer, or documents marked 'without prejudice' and created in an effort to settle a dispute, as having a confidential (or a privileged) status - they will be held inadmissible in legal proceedings. This allows you to be frank with your lawyer and unconstrained in endeavours to settle a matter. The privileged status of these communications means that they cannot be used against you.

The actual prohibitions on the use of privileged documents can be found in the Evidence Act 1995.While the Act may create the privileged status of documents, it also has numerous exceptions which permit the admission into evidence of what would otherwise be privileged. Some exceptions are well known - think of waiver- but others are less so. What follows is a review of recent decisions dealing with more unusual situations in which privilege may be lost.

Legal privilege and the commission of a fraud

Starting with legal professional privilege, a recent Victorian decision1 considered whether some legal advice, which would otherwise have been privileged from disclosure, was admissible because it was prepared in the 'furtherance' of the commission of a fraud, which is an exception to the privilege rule. In respect of this exception:

It is capable of applying not only where a court has found that a fraud has occurred, but where there are reasonable grounds for reaching a finding that a fraud has occurred; Its operation is not limited to criminal or extreme cases, but it has the potential to apply in commercial matters. Candidates would potentially be dishonest collusion between two parties to avoid an obligation to a third party (such as the payment of a secret commission), or where a party is...