The term “privileged” is often thrown around and slapped on the top of letters and emails. But do you understand how legal professional privilege applies, and when it is appropriate to use?
Did you know: Legal Professional Privilege protects the disclosure of confidential communications or documents prepared by the client, their lawyer or another person, for the dominant purpose of:
- the lawyer providing legal advice to the client; or
- the provision of legal services relating to actual or anticipated legal proceedings to which the client is or may be a party.
Relevantly to you as an insurer, privilege will apply where the document was created or commissioned by the insurer for the dominant purpose of provision to lawyers for the purpose of obtaining advice or for use in actual or anticipated legal proceedings.
Documents that privilege is commonly claimed over include:
- Expert reports (including drafts)
- Letters of instruction
- Claim notes (or parts thereof)
- Call recordings (including with experts)
- Any other document that would be created by you, or others who you have engaged, as part of the claim process.
The “dominant purpose” is one that predominates over other purposes; i.e. the supreme purpose.
In determining what the dominant purpose is, a good starting point is to ask yourself what was the intended use or uses of the document? Was the document created or commissioned to ascertain liability, or was it created for the purpose of deciding whether to provide indemnity? These are the type of questions you need to consider when ascertaining whether you can claim privilege over a document.
The concept of obtaining legal advice is fairly wide and if a lawyer commissioned the document on your behalf, then your ability to claim privilege over it is a lot easier. However, privilege may not extend to internal legal advice provided within the business and so you should act prudently if providing advice or attempting to rely on privilege in that context.
Actual or anticipated legal proceedings does not necessarily mean that the commencement of proceedings be more probable than not, but there must be a real prospect of litigation. When legal proceedings are threatened in correspondence such as a letter of demand, upon receipt of the demand, it’s reasonable to infer that litigation is anticipated. Therefore, privilege should be asserted over documents prepared from that date onward.
If you have concerns about having to disclose a document, you can always instruct a lawyer to commission the document on your behalf. This is not a full proof method, but it is certainly less likely to be scrutinised than if you commissioned the document yourself.
About me (Georgia Wiadrowski) – I’ve spent the past four years as an insurance litigation lawyer in the William Roberts’ Victorian team. Outside of work, you’ll often find me enjoying bushwalking adventures or lending a hand in the family vineyard and winery.
