Legal professional privilege and confidentiality

Privilege requires a legal basis

Legal professional privilege, or LPP, protects qualifying confidential legal communications and documents. Confidentiality alone does not establish the right to withhold information.

Advice privilege concerns the dominant purpose of giving or obtaining legal advice. Litigation privilege concerns legal services for actual or anticipated proceedings.

A lawyer’s involvement alone does not establish privilege. Examine the purpose, content and circumstances of the communication.

Source: Australian Securities and Investments Commission: Categories of LPP; particular situations.

The Act preserves privilege

Section 242 preserves a person’s right to refuse information or documents protected by legal professional privilege.

Providing a description of potentially privileged material does not, of itself, waive privilege. This protection is not permission to disclose the privileged content carelessly.

Confidentiality and privilege remain separate questions. For example, section 49C expressly permits certain disclosures despite general law obligations of confidence.

Source: Australian Government, Federal Register of Legislation: 242; 49C(4)-(5).

Apply the separate SMR conditions

Section 41 has specific rules for suspicious matter reports, or SMRs. Section 242 does not replace those rules.

Under section 41(2A), the entity may refuse the report if it reasonably believes all information comprising the grounds for its suspicion is privileged.

If some but not all required report information is reasonably believed to be privileged, section 41(3)(aa) requires an accompanying LPP form.

The test about all suspicion grounds differs from the test about some required report information. Do not treat them as interchangeable.

Source: Australian Government, Federal Register of Legislation: 41(2A) and (3)(aa); 242.

Do not assume a general extension

Section 41(2)(aa) provides five business days after the day of suspicion only for the specified non-terrorism grounds and privilege conditions.

The entity must reasonably believe some but not all required report information may be privileged. The privilege, if it exists, must belong to another person.

Otherwise, the ordinary non-terrorism period is three business days after the day of suspicion. The terrorism-financing period remains 24 hours after suspicion forms.

The full reporting test and applicable exemptions still matter. Seek qualified legal advice promptly where the privilege position is uncertain.

Source: Australian Government, Federal Register of Legislation: 41(1), (2), (2A) and 42.

Example: one folder, different documents

In a fictional practice, a customer folder contains routine transaction instructions and confidential legal advice. A staff member labels the whole folder privileged.

The lawyer examines each relevant item and its purpose before responding. The label alone does not decide whether the transaction instructions attract privilege.

The practice applies the relevant reporting or notice conditions. It does not disclose the legal advice merely to prove that a privilege claim exists.

Sources: Australian Securities and Investments Commission: Particular situations; Australian Government, Federal Register of Legislation: 242 and 41.