You can't have your cake and eat it too...

In Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Ltd [2021] FCA 511, the Federal Court handed down an important reminder to in-house lawyers and legal advisers on legal professional privilege, finding conduct that was inconsistent with maintenance of confidentiality waived privilege - even when done with the best of intentions.

Background

This case relates to the 2018 prosecution of cartel conduct offences by the Commonwealth Director of Public Prosecutions (CDPP), following an investigation by the Australian Competition and Consumer Commission (ACCC) into an institutional share placement undertaken by various financial institutions.

JP Morgan Australia Pty Limited (JP Morgan) had conducted an internal investigation into its own conduct in relation to the share placement and subsequently self-reported to the ACCC.  In this process, JP Morgan’s administrative corporate entity was granted conditional immunity[1] from civil and criminal action in relation to the ACCC’s investigation - one such condition was “to provide full, frank and truthful disclosure and cooperation to the ACCC and withhold nothing of relevance.”

The partial disclosure

In the course of JP Morgan’s investigation, its inhouse lawyers and legal advisors had prepared a variety of documents, including notes of employee interviews and outlines of evidence for each employee, which it ended up later producing to the CDPP in redacted form, asserting privilege on various bases over the redacted portions of the documents. 

The ACCC pressed for unredacted copies of the documents by way of subpoena, and, eventually, an agreement was reached between the parties to give partial disclosure to the CDPP which included reading aloud portions of the outlines of evidence. JP Morgan had understood that, by not complying with the subpoena, it was at risk of losing its immunity.

Ultimately, the Federal Court found that, while the notes of interviews and outlines of evidence were protected by privilege at the time they were created, JP Morgan waived that privilege by its partial disclosure of the documents.

Comment

Inhouse lawyers and legal advisers must read and take heed of this judgment, and be aware that any disclosure to third parties risks waiving privilege.

There are obvious commercial and strategic consequences when a business has to disclose its confidential material to a regulator or to other parties in litigation - here are some safeguards for your business to limit that risk:

• clearly identify or mark confidential and/or privileged documents;
• specify the limited purpose for which legal advice is being disclosed - make it clear that no waiver of privilege is intended;
• minimise the circulation of legal advice or communications around your business;
• consider the use of confidentiality agreements/regimes; and
• consider carefully the form in which any interviews are documented.