Legal professional privilege: lessons learned for multi-jurisdictional or multi-disciplinary matters

• Published date: 15 May 2022
• Law Firm: Corrs Chambers Westgarth
• Author: Richard Flitcroft, Katrina Sleiman and Kirsty Sutherland

The ATO's appetite for challenging claims of legal professional privilege (LPP) has been highlighted by a recent Federal Court of Australia decision (Commissioner of Taxation v PricewaterhouseCoopers [2022] FCA 278) and the consultation in the lead-up to the imminent release of the ATO's new LPP Protocol.

Increased scrutiny by ATO

From at least late 2018, the ATO has noted it had been 'increasingly testing the engagement' of legal advisors where it had received LPP claims in response to formal notices that appeared to be 'excessive'.

One of the ATO's key messages at the 30 November 2018 National Tax Liaison Group meeting was that law firms involved in providing advice on the validity of LPP claims should ensure their engagement included confirming the fundamental elements required to establish privilege, rather than make assumptions that these elements had been satisfied.

The National Tax Liaison Group ultimately resolved to establish a working group consisting of ATO and National Tax Liaison Group members to consider the ATO's view of the scope of LPP and establish guidance in this area (LPP Working Group).

The final ATO LPP Protocol is expected to be released imminently, following the release of the draft LPP Protocol in September 2021, stakeholder consultation and internal review continuing into this year.

In its draft LPP Protocol, the ATO recommended steps for the assessment of whether LPP arises, and consequential steps to particularise a LPP claim, where the service or engagement involves (among others):

• legal practitioners acting in their capacity as legal practitioners (only);
  
  
• in-house counsel; or
  
  
• non-legal persons or legal practitioners not acting in their capacity as legal practitioners.

For services provided by (among others) non-legal persons or legal...