Thursday 3 April 2014

ACCC v Coles Supermarkets Australia Pty Ltd - Implied waiver of legal professional privilege

Legal professional privilege (LPP) is a common law right [1] which protects the confidentiality of communications between a client and their legal adviser.  LPP generally prevents the compulsory disclosure of a confidential communication, whether ordered by a court (for example subpoenas or discovery) or by a person or body with similar compulsive powers. [2]
Where a client waives the confidentiality of a communication, any LPP attaching to that communication is lost.  Disputes sometimes arise as to whether, despite a client wanting to claim that a communication is still confidential, they have impliedly waived confidentiality by saying or doing something inconsistent with that position. [3]

So in what circumstances might a person say or do something inconsistent with maintaining the confidentiality of a privileged communication?

The recent case of ACCC v Coles Supermarkets Australia Pty Ltd (ACCC v Coles) [4] considered this question in the context of a dispute about baked bread.

The facts of ACCC v Coles
In mid-2012, Coles began selling bread products through its in-store bakeries which had been ‘par baked’ by certain suppliers.  The ACCC commenced proceedings in the Federal Court seeking various forms of relief and penalties, alleging that Coles’ advertising of these bread products using slogans such as “Freshly Baked In-Store” and “Baked Today, Sold Today” was misleading and deceptive.  Coles denies this allegation.

To narrow the issues in dispute, the parties sought to formulate an agreed statement of facts (ASOFs). [5]  In the course of negotiating the contents of the ASOFs, Coles’ lawyers sent a letter to the ACCC’s lawyers (the November Letter) describing information about the baking processes used by the suppliers.  This information was summarised from confidential correspondence sent to Coles’ lawyers by its suppliers. [6]

The ACCC sought the issue of subpoenas to Coles' suppliers requiring production of copies of this confidential correspondence.  While the ACCC accepted that LPP attached to these documents, it argued that Coles had waived confidentiality in these documents because it had disclosed the 'gist' of them in the November Letter.

The decision
The Federal Court held that while the November Letter disclosed the gist of the communications, this was not inconsistent with a maintenance of confidentiality in the documents.  It noted that legal representatives in litigation regularly exchange correspondence summarising their clients' instructions or other confidential communications, and that it may have a 'chilling effect' on such exchanges (which are helpful in negotiating agreed facts) to find that they result in an implied waiver.

Another factor which was considered important by the Court was that the ACCC could still adduce evidence about Coles' suppliers' baking processes in the usual way (ie by way of evidence in the case, rather than in an ASOFs), regardless of whether the correspondence from the suppliers was available for inspection by the ACCC.

For these reasons, the Federal Court decided that Coles had not impliedly waived LPP in the documents by sending the November Letter. 

What does this mean for the Public Sector?
ACCC v Coles Supermarkets highlights the importance of the relevant context in assessing whether the voluntary disclosure of the gist of a confidential communication constitutes an implied waiver.  Courts tend to look at the practical effect of deeming that confidentiality has been waived, and will consider what is fair in all of the circumstances.

However, there can be any number of situations where disclosing the 'gist' of a privileged communication could be enough to result in a loss of LPP.  The context will be different in each case and may involve complex policy considerations, making it difficult to predict what effect such disclosure will have.

For this reason, it is never wise to reveal the contents of communications with your legal advisers, or documents prepared in relation to legal matters without first obtaining advice.  One can't always, after all, eat one's cake and still have it. 

For advice on this issue, contact:
Managing Principal Solicitor

Principal Solicitor

Senior Solicitor

Note: Judgement was reserved in the substantive application in the proceeding by Allsop CJ on 21 February 2014.

[1] In Victoria, Division 1 of Part 3.10 of the EvidenceAct 2008 (Vic) has codified LPP for the purposes of court proceedings to which that Act applies, renaming it ‘client legal privilege’ (CLP).  Some aspects of the privilege are different between the common law and the Evidence Act, none of which are directly relevant for the purposes of this blog post.
[2] In rare cases, statutory powers will abrogate privileges, so that they cannot protect disclosure where these powers are exercised.  See for example, section 143 of the Independent Broad-based Anti-corruptionCommission Act 2011.
[3] The common law was stated in the High Court case of Mann v Carnell (1999) 201 CLR 1 at 13.  Section 122 of the Evidence Act 2008 (Vic) applies essentially the same test as the common law to determine whether a client has impliedly waived CLP.
[4] [2014] FCA 45.
[5] See section 191 of the Evidence Act1995 (Cth), and its equivalent provision in the Evidence Act 2008 (Vic).
[6] At common law, LPP can also attach to confidential documents sent by a third party to a legal advisor so long as they are for the dominant purpose of providing the client with legal advice or for current or contemplated litigation.  The situation is the same under the Evidence Act 2008 (Vic): see section 119(b).

1 comment:

  1. The information that you have provide is really helpful. I always find it very interesting to read your posts and your replies.