On Thursday 7 August the High Court’s 4-1 majority decision in Osland v Secretary to the Department of Justice [2008] HCA 37 affirmed the relevant test outlined in its earlier decision in Mann v Carnell (1999) 201 CLR 1 regarding waiver of legal professional privilege by conduct.  The test remains one based on a party's conduct in the context and circumstances of each case, and in the light or any considerations of fairness that arise.  The facts of the case related to a murder conviction and a petition for mercy that was refused by the Victorian Attorney-General.  The High Court majority’s application of the test resulted in a finding that no waiver of legal professional privilege occurred in circumstances where the Attorney-General referred in a press release to a joint memorandum of legal advice he had obtained and the recommendations made in that advice that the petition should be denied. 

While matters of due process and public interest in government transparency were relevant in the Osland case, in a commercial context the application of the same test by the Federal Court in the recent decision of Rich v Harrington [2007] FCA 1987 resulted in a finding that legal professional privilege had been waived in legal advice obtained by accounting firm PricewaterhouseCoopers (PwC) relating to a discrimination case brought by one of its former partners.  In that case, PwC's lawyers referred, in correspondence to the plaintiff's lawyers, to legal advice that PwC had obtained as a basis for PwC's actions and view of the claims made against it.  The Federal Court held that this reference constituted a waiver of privilege in that advice.

The High Court’s confirmation of the test in Mann v Carnell means that it remains paramount for commercial parties to be conscious of the potential consequences of any reference they might wish to make, in correspondence or otherwise, to external legal advice they have obtained.  Parties would be well advised to err on the side of caution and refrain not only from referring to the substance or gist of any legal advice but also to the fact that such advice has been obtained.  Parties are better advised simply to state the position they adopt or views they hold without any reference to any legal advice they have obtained. 

For any further information please contact Liam Prescott, Senior Associate.