Proctor : March 2017
25 PROCTOR | March 2017 Legal privilege presents particular concerns for in-house counsel, as Jemima Harris explains. Appropriate maintenance and security of legal files, both physical and electronic, against access by non-legal personnel is another way independence of the legal function of an organisation can be maintained. Implement and enforce a policy of locking legal files away when not in use and ensure appropriate security exists for electronic files and email. On a practical level, in-house counsel can assist in protecting the privilege attached to communications they make by employing practices such as prominently marking emails and other documents containing legal advice as ‘Confidential and Privileged’, either in the subject line and/or at the top of the document. Care should be taken to apply such designations to genuinely privileged communications; claiming privilege when it isn’t warranted is inconsistent with a lawyers’ fundamental duties, and may invalidate genuine claims of privilege with disastrous results. Including a notice will not be determinative of the existence of privilege, but it will certainly assist in making the argument if the need arises. A court will look at the substance of the communication and the context in making its determination. Conversely, the absence of such a notice will not of itself defeat a claim of privilege; waiving privilege requires the doing of an intentional act done with knowledge of the consequences.8 A common sense approach to the use of such notices when dealing with a sensitive issue is to consider the dominant purpose test, and mark your advice accordingly. Email is often treated as an informal method of communication, yet email is no less discoverable than any other form of communication. So, if in doubt... don’t hit send. When using email, only send advice to individuals within the business who have a real need to know, and mark the email with a notice such as ‘Not to be distributed to anyone other than the named addressees’, to remind the recipients not to forward it on. When responding to emails, consider altering the subject line to highlight the confidentiality of your response and don’t necessarily ‘reply all’. Education is key It is crucial to educate your internal clients about the importance and value of privilege and the potential ramifications of loss or waiver. The exponential increase in data created by organisations in recent years makes management of information, and maintaining the confidentiality of that information, all the more challenging. Fundamental to ensuring privilege is maintained is ensuring that your client understands what privilege is and isn’t. A seasoned senior executive from a former corporate client of mine had trained their team to copy a member of the legal team on certain emails in the mistaken belief that doing so would somehow magically make privilege attach to an already non-confidential document attached to that email. Non-lawyers often assume that only communications between senior members of staff will be discoverable. It is important that all staff understand the role they play in maintaining privileged communications. Similarly, staff should be cautioned about creating potentially discoverable ‘post mortem’ documents setting out details of a deal gone awry or paraphrasing legal advice in communications with third parties as these may be extremely damaging or embarrassing to the organisation if they are required to be produced. Providing appropriate training to relevant internal clients on the subject will not only assist in ensuring privilege is maintained but also provide an opportunity to build rapport between the business and the legal department. This training should be documented, including confirming who has attended, and refreshed at regular intervals. Keeping the purpose of communications made in your capacity as an in-house lawyer front of mind will assist you to take the appropriate steps to assert and protect privilege. Educating your non-legal colleagues will bolster this protection and hopefully minimise inadvertent waiver of privilege. In-house counsel Jemima Harris is managing counsel at lexvoco. Notes 1 In the case of legal advice privilege. 2 In the case of litigation privilege, such as communications with expert witnesses. 3 See Esso Australia Resources Limited v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 at . 4 See, for example, Ritz Hotel Ltd v Charles of the Ritz Ltd (No.4) (1987) 14 NSWLR 100 and more recently IOOF Holdings Ltd v Maurice Blackburn Pty Ltd  VSC 311. 5 Seven Network Limited v News Limited  FCA 142. 6 Australian Hospital Care (Pindara) Pty Ltd & Anor v Duggan & Ors  VSC 131. 7 See s24 of the Legal Profession Act 2007. 8 Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305; see also rule 34, Australian Solicitors Conduct Rules 2012.