Legal professional privilege is often taken for granted by lawyers; and for that matter by some clients. This post discusses its application in the context of proceeds of crime and confiscation matters. Lawyers acting in such matters need to be particularly on guard in relation to the privilege.
Legal professional privilege (or LPP) is the ‘seal’ that keeps communications between lawyers and clients confidential. In a criminal investigation the Police are not entitled to access communications between the accused person and their lawyers.
The rationale for Legal Professional Privilege
…legal professional privilege is of fundamental importance in the administration of justice. It “promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline” ((Grant v Downs (1976) 135 CLR 674 at 685 (Stephen, Mason & Murphy JJ). ))
It plays an essential role in protecting and preserving the rights, dignity and freedom of the ordinary citizen – particularly the weak, the unintelligent and the ill-informed citizen – under the law ((See, generally, Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 490, As quoted in Carter v Northmore Hale (1995) 183 CLR 121 at 131 (Deane J). ))
LPP has been recently affirmed by a unanimous full bench of the High Court as:
… a right which is fundamental to persons and to our legal system. It has also been described as “a practical guarantee of fundamental, constitutional or human rights”. Such descriptions point up the importance of the privilege. They serve to show that it is not merely an aspect of curial procedure or a mere rule of evidence but a substantive right founded upon a matter of public interest… ((Glencore International AG v Commissioner of Taxation (2019) 265 CLR 646 at , citations omitted.))
… [a] rule promotes the public interest because it “assists and enhances the administration of justice by facilitating the representation of clients by legal advisers”. By keeping secret their communications, the client is encouraged to retain a lawyer and to make full and frank disclosure of all relevant circumstances to the lawyer. … ((Glencore at .))
The High Court has gone as far as saying that an accused person is not entitled to subpoena documents protected by legal professional privilege even if the documents may establish the innocence of the accused. ((Carter v Northmore Hale (1995) 183 CLR 121)) In other words the maintenance of LPP will trump keeping the innocent out of jail.
LPP is so firmly entrenched in Australian law that it is easily, albeit wrongly, thought of as absolute.
However, lawyers and clients dealing with proceeds of crime or criminal property confiscation matters need to appreciate that it is not absolute.
Abrogation of legal professional privilege in confiscation and proceeds of crime
There are many laws that abrogate (or override) legal professional privilege. They include:
- Sections of the Proceeds of Crime Act 2002 (Cth) (POCA) that abrogate privilege for the purpose of compulsory examinations ((see s197(2)(b). )) conducted under s180, and production orders ((see s206(1)(c). )) issued under s202;
- Section 139 of the Criminal Property Confiscation Act (WA) (CPCA) which has a blanket abrogation; and
- Sections of the Criminal Assets Recovery Act 1990 (NSW) (CARA) in relation to examination and production orders; ((See sections 13(1)(c) and 35(1)(c) respectively. )) and
- The Criminal Proceeds Confiscation Act 2002 (Qld) in relation to examination orders. ((Section 40(1)(c). ))
As such it is relatively easy for the Australian Federal Police, WA Police, the Corruption and Crime Commission (WA) or the NSW Crime Commission to obtain an order or issue a notice, the terms of which may require production of material that would ordinarily be protected by legal professional privilege.
WA Police and the CCC can obtain such material using search warrants issued by a Justice of the Peace, without any oversight by a Judge or Magistrate.
Why is legal professional privilege overridden
The policy justification for abrogating legal professional privilege appears to be that it is necessary for the authorities to be able to access evidence in relation to matters such as
- Who gave instructions for the creation of a trust;
- Who the beneficiaries of a trust may be; and
- Why a property transaction was structured in the way it was.
These can be important matters in a proceeds of crime case. Clear evidence will often be found on a solicitor’s file.
Not all jurisdictions agree that abrogation is desirable. There does not appear to be any abrogation in the Confiscations Act 1997 (Vic) nor the Criminal Assets Confiscation Act 2005 (SA). And s165 of the Criminal Property Forfeiture Act 2002 (NT), which is largely modelled on the Western Australian Criminal Property Confiscation Act 2000 goes so far as to say: “For the avoidance of doubt, client legal privilege applies in relation to proceedings under this Act.”
What are the consequences?
The consequences of the abrogation are however far broader.
Proceeds of Crime investigations are often long running. It is common for the authorities to continue to issue notices and continue to execute search warrants (including against law firms and accountants offices) years after property is first frozen. Compulsory examinations will almost always occur after property has been frozen (and thus after the target of the investigation has retained lawyers).
There is a real likelihood that such notices, orders and warrants will be broadly drafted and will capture (whether deliberately or not) correspondence that has passed between lawyers and their clients about the proceeds of crime proceedings.
Unless care is taken the proceeds of crime investigators may get access to advice that has been given to the client about how the confiscation / proceeds of crime matter should be defended.
This is I suggest an unintended consequence of the broad abrogation of legal professional privilege found in the CPCA and the POCA.
What precautions should lawyers take?
Do not take original documents.
This is good advice in relation to the defence of criminal charges as well. If a client has a document that is relevant to their case and they give the original document to their lawyer, the document is not protected by legal professional privilege in the first place. Its not even a question of abrogation. The document simply isn’t protected. The reason being the document was not brought into existence for the dominant purpose of obtaining legal advice. The fact it was provided to the lawyer for that purpose does not attract protection.
If the lawyer takes a copy of a document, rather than the original, legal professional privilege is likely to attach to the copy. Provided the copy was made for the dominant purpose of obtaining legal advice. See generally Propend Finance where McHugh J observed:
No doubt it seems contrary to commonsense that the law should give privilege to the copy of a document when it does not give it to the original. But in this area of the law, as in other areas of law and life, commonsense turns out to be a misleading guide. This is because legal professional privilege turns on purpose, and no argument is needed to show that the purpose of a client or lawyer in making a copy document may be very different from the purpose of the person who created the original. ((Commissioner of the AFP v Propend Finance Pty Ltd (1997) 188 CLR 501 at 552; Gaudron J (543-4), Gummow J (571), Kirby J (587, 590) and Brennan CJ albeit for different reasoning concurring.))
Mark communications clearly.
All communications with the client, letters, emails, even text messages should clearly indicate who they are from, who they are to, and what their subject matter is. Any substantive communication should boldly state on its face that the document is “subject to Legal Professional Privilege”. Emails and letters should clearly be headed with reference to the applicable proceeds of crime / confiscations court proceeding (by reference to the Court action number).
Explain these issues to your client.
Early in the life of a proceeds of crime retainer of any complexity it is important to discuss these issues with your client. Your client needs to know that if the Police turn up in 6 months and seize their phone, laptop or hard copy correspondence they should say something to the effect of “that device / document contains communications with my lawyer about the proceeds of crime matter. I want it sealed up and not inspected until your entitlement to it has been resolved.”
Be aware (and explain to your client) that your records in relation to legal expenditure are ‘fair game’.
Ledgers and records in relation to trust accounts, and the payment of legal fees and disbursements, are not protected by legal professional privilege. They will be accessible by the authorities under compulsory notices. They can be relevant, particularly in unexplained wealth cases, to establishing the client’s financial position.
Explain the potential for covert (secret) orders.
Particularly in the case of matters under the Proceeds of Crime Act 2002 it is prudent in my view to advise the client up front of the possibility that:
- the AFP might obtain a production order against the law firm under s202 of that Act;
- the order might require the firm to produce documents to the AFP; and
- that the firm may be prohibited from telling the client about the fact the notice has issued.
Instructions should be sought from the client as to whether the client wants the firm to challenge any such notice in the Federal Court on the grounds that it constitutes an abuse of process. I explain this further below.
Why are these precautions important?
My concerns are by no means hypothetical. They are borne of direct experience. In the last 2 years I have acted for:
- A client who had his phone seized by the Corruption and Crime Commission. Stored on that phone were communications with his lawyers about his ongoing confiscations case against the CCC. The CCC agreed to have an independent lawyer review (in consultation with us) the digital extract of the phone and remove all such communications before the balance of the extract was passed on to CCC investigators.
- Another client whose lawyers were issued with a production order under s202 of the Proceeds of Crime Act 2002. On my advice the solicitor challenged the breadth of the production order in the Federal Court. We obtained an interim order staying the production order. Unfortunately, the proceedings are heavily suppressed and I am unable to say anything more about the reasons the Court gave for granting the interim order. Ultimately the matter was resolved without the need for a final hearing.
- A third client whose house was searched by WA Police under a s74 Criminal Property Confiscation Act 2000 search warrant. Police seized his physical notebook which contained his detailed hand-written notes made in several conferences with me. The DPP ultimately agreed that independent counsel should review the document, and that privileged material would not be provided to the DPP’s office.
In each case, agreement was reached, after submissions were made to the relevant authorities.
How are materials protected in the face of abrogation?
It is necessary in my view to accept that the relevant legislation abrogates LPP in the broadest of terms.
At its heart, my argument is that it would be improper / unreasonable (in an administrative law sense) for the authorities to use a compulsory power (and rely on that abrogation of LPP) to obtain access to documents that reveal advice about the Proceeds of Crime / Confiscations proceedings.
Five members of the High Court agreed in Mansfield v DPP (WA) (2006) 226 CLR 486 at 503  that legal representation in confiscations matters benefits “… not only the individual but [makes] for the more effective exercise of the jurisdiction conferred…” on the Court by the confiscations legislation. It makes a mockery of that position if the Police can simply seize what would ordinarily be LPP protected communications, about those proceedings.
To allow access to material that is ordinarily protected by LPP could turn a client’s lawyers, who might be thought of as their shield, into a sword against them.
Naturally I have expanded upon those arguments in submissions drafted to the relevant authorities.