Class Notes (808,489)
Australia (1,838)
Law (441)
JSB171 (400)
All (349)

2.2.2 Duties to the Client--Confidentiality

15 Pages
Unlock Document

Queensland University of Technology

Duties to the Client—Confidentiality & Privilege Legal Professional Privilege Legal professional privilege covers communications between client and legal adviser— (Baker v Campbell; Commr of Taxation v Pratt Holdings (2003)) o to obtain confidential legal advice; or o regarding existing or anticipated litigation • Need not be sole purpose—just principle purpose— o for the dominant purpose of obtaining legal advice (otherwise would not have been created) o come into existence for the purpose of existing or anticipated litigation Esso Australia Resources v Commissioner of Taxation (1999) (if purposes = legal advice + subsidiary purpose which would not by itself lead to the creation of the document → subsidiary purpose will not lead to a loss of privilege) • Rationale—to encourage full and frank disclosure between client and practitioner, in the public interest in the administration of justice: Esso Australia Resources Ltd v Commissioner of Taxation (Cth) (1999) (HCA) • May include copies of unprivileged documents—Look to purpose of making the document: Australian Federal Police v Propend Finance (includes copies of unprivileged documents made for the dominant purpose of giving or receiving legal advice, or for use in existing or contemplated litigation) • Fundamental common law right, not just a rule of evidence: Bristile (ASIC seeking to have docs between client & solicitor lodged  lodged || but Miller J stating that entrenched fundamental right | requires clear words to abrogate) Obtaining Confidential Legal Advice • Must be confidential communication between legal adviser and client o ie not communication—  with solicitor acting outside of professional capacity,  communication which is not related to the giving of any confidential advice. • Generally does not apply to: • trust account records: Packer v Deputy Commissioner of Taxation (documents left with solicitor simply to try and prevent disclosure) • correspondence merely passing on information or which relates purely to a commercial transaction (ie. not "legal advice"): Re Cooksley & Associates • diary notes of oral conversations: Anford Pty Ltd v GCA Properties • costs agreement and terms of the retainer between solicitors and their client: Cook v Pasminco Existing or Anticipated Litigation • not necessary that litigation has commenced if reasonable apprehension of litigation • must be a real chance ↔ not a mere possibility: Mitsubishi Electric v Victorian WorkCovep ‘Without prejudice’ Communications (Settlement) • Documents brought into existence in an endeavour to settle a dispute protected: Field v Commissioner for Railways for NSW (PI from alighting moving train—w/o prejudice letter seeking med exam to settle—doctor examined  comments by doctor in later trial not privileged as clear that he would give evidence if negotiations broke down) o = reasonably incidental to negotiations: Rush & Tomkins v City of London; Austotel v Jamieson • Must be genuine attempt to settle a dispute: Glengallen Investments v Arthur Andersen • Substance over form— o even if not marked ‘without prejudice’: Rodgers v Rodgers Andrew Trotter LWB433 Professional Responsibility o Not necessarily because marked ‘without prejudice’: McBeath Nominees v Jenkins Development • Effect—also prevents disclosure to party not involved in the communications: Mercantile Mutual Custodians v Village Nine Network Exceptions • Communications which would otherwise be privileged lose their immunity from disclosure if— o illegal purpose | can be described as a "fraud on justice": Gibbs CJ in AG (NT) v Kearney (NT administrator attempting to extend regulations over area to prevent native title claims— claimed privilege  not privileged ← related to illegal purpose | deliberate use of statutory power against public interest) o amount to participation in crime or a fraud: Baker v Campbell Breach of Confidence Elements Solicitors not to divulge confidential information except under limited circumstances: sr3.2; br109 1. Information of a confidential nature o = Not generally available to the public: Saltman Engineering v Campbell o eg—customer names: Lansing Linde v Kerr  but could remember independently of list: Digital Pulse v Harris o Can be photographic: Creation Records v News Group Newspapers o May include the fact that litigation is impending—cannot eg ring former client to ask for permission to act 2. Imparted in confidential circumstances o If disclosed for a specific use then confined to that use: Saltman v Campbell; Castrol v Emtech o NOT if the practitioner sees the client—then is merely a witness Exceptions to duty to keep confidence (legal professional privilege) Must never disclose confidential information unless— • Compulsion of law o permitted or compelled by law to disclose: sr3.2; br109 o thought they would be compelled under law to tell: sr3.3 • Prevent harm o thought on reasonable grounds it would prevent serious offence: sr3.4 o to prevent imminent serious physical harm to the client or another person: sr3.7 • Not confidential o Client authorises disclosure: sr3.1; br109(c)  Specific consent → cannot go further than that consent: br110 o Information lost confidentiality through publication: sr3.5; br109(a) o obtained same information from person not bound by confidentiality, & that person does not give the information in confidence: sr3.6; br109(b) • To people working for them (solicitor | clerical staff | pupil etc): br111 o Person shown bound by same duties: br112 (under rr109-110) Client lies to the court in some material way (or falsifies document | or gets someone else to) → • Must— o advise the client that the court should be informed & ask authority: sr15.1.1 o Promptly inform the court upon getting consent from client: sr15.1.3; br34(b) o Otherwise, refuse to take part further in the case: sr15.1.2; br34(a) • Must not inform the court without consent: sr15.1.4; br34(c) • Applies during hearing or after judgment is reserved: sr15.1; br34 Andrew Trotter LWB433 Professional Responsibility Consequences of Breach of Privilege • Employee of law firm cannot leak privileged information: s184(3) (presumes law firm is incorporated—misuse of information for own benefit | recklessly as to detriment) o $2000 penalty or 5yrs: s184(3) o May also be sued for compensation: s1317FA • Employee of legal aid breaching duties of disclosure → $5000 or 6mths: s82(2) Legal Aid Act • Generally—disciplinary proceedings: s418A • Breach of duty under tort & equity generally Fiduciary Duties—Conflict of interest Must avoid conflicts of interest between • client and yourself • client & client (former or current) Rules based on avoiding conflict of interest rather than confidential information: Prince Jefri Bolkiah v KPMG • Must avoid a conflict of interest between clients: sr8.2; br114&115 • Failure to avoid conflict of interest may be professional misconduct or UPC— o As breach of BR or SR: s420 o Failure to disclose conflict with former client: Re Sciacca (conveyance—purchaser was former client—failed to disclose  UPC, fined $4K) Current clients Fully Informed Consent May act with fully informed consent— • Solicitor—from a client after informing them that— o Cannot—  Disclose confidential information of one party to the other: sr8.3.1(a)  Give advice to one party contrary to the interests of another: sr8.3.1(b) o Must cease to act for all if obligation arises to act contrary to interests: sr8.3.2 • Barrister—from client or instructing solicitor: br116 • May also require independent legal advice: LSC v Podmore (sophisticated client consented—but spoke poor English so had trust in lawyer  independent legal advice also required) Specific Cases for Solicitors • Can act for 2 defendants so long as no conflict: sr3, 4, 8 • Must inform party of potential disadvantages & need written acknowledgement to act for — o Vendor & purchaser of land: sr8.5.1  Should not act for vendor & purchaser if real estate agent or one of the parties offers to pay all legal fees except with fully informed consent: sr8.5 guidelines o Vendor & purchaser of business: sr8.5.2 o Lessee & lessor: sr8.5.3 o Financier & borrower: sr8.5.4 • Must not act for— o Guarantor & borrower unless guarantor related to the borrower— (sr8.6)  Borrower: sr8.6.1  Director or borrower: sr8.6.2  Shareholder of borrower: sr8.6.3  Beneficiary in a trust of which the borrower is trustee: sr8.6.4  Party holding a beneficial interest in borrower: sr8.6.5  Body corporate related to borrower within Corporations Act: sr8.6.6 Andrew Trotter LWB433 Professional Responsibility  Director of a related body corporate: sr8.6.7  Shareholder of body corporate: sr8.6.8  Party holding a beneficial interest in a related body corporate: sr8.6.9. o Developer, builder or subdivider & other party: sr8.7 If cannot remedy • Solicitors—if cannot continue to act without contrary to interests → must cease acting for all parties: sr8.4 • Barristers—  Conflict between clients → if a real possibility of conflict—must cease acting for—  Problem of confidentiality → all clients to which br109 would apply: br114(a) (must determine asap on brief) | br115(a) (if determines during hearing)  Conflict of interests → preference to earlier clients: br114(b)(i) (must determine asap on brief) | br115(b)(i) (if determines during hearing)  Conflict between client & solicitors’ interests → must—  Advise the instructing solicitor: br117(a)  If the advising solicitor does not agree—advise client in solicitor’s presence br117(b) Current client & Past client • Conflict check before instructions taken Policy—Need to balance interest of new client, old client and appearance to public of justice: Fruehauf Finance Corporation v Feez Ruthning Cannot act if— (br113) 1. previously acquired confidential information from a client: sr4.1 2. real possibility that it will be disclosed & used to their detriment: sr4.2  Inherent Jurisdiction of the court: Spincode; Kallinicos v Hunt Legal practitioners are officers of the court—so has inherent jurisdiction where conduct ‘which would cause reasonable members of the community to lose confidence in the system’ • Objective test as to whether integrity of judicial process requires it • Considerations against injunction— (Kallinicos v Hunt) o Clients should generally not be deprived of their choice of lawyer o Timing, cost & inconvenience of changing lawyer  Independent Equitable Duty of Loyalty to Former Client o Can be restrained even if have not breached any legal or equitable right o Need not prove that harm is an inevitable consequence of solicitor acting against former client o As an officer of the court, solicitor fills a different role from normal private fiduciaries (Spincode Pty Ltd v Look Software per Brooking JA (firm acted for Coy since incorporation— covertly gave advice to 2 shareholders in disputes—acted for shareholders in winding up proceedings  injunction to prevent from acting for shareholders ← based on position of solicitor in administration of justice—different to that of a private fiduciary)) ; Geelong School Supplies Pty Ltd v Dean (Young J) • Based on loyalty—May be prevented from acting even if no actual breach of confidence: Village Roadshow v BDW (V buying back preference shares—trustee engaged BDW—opposition to buyback also engaged BDW  no actual breach of confidence failed—but fiduciary duty breached) • Has since been considered obiter—and court have refused to follow: Asia Pacific v Optus  Confidential Information Andrew Trotter LWB433 Professional Responsibility o cannot act for a subsequent client if a real and not fanciful possibility of breach of confidentiality of a previous client o need not show that the risk is substantial (Prince Jefri Bolkiah v KPMG [1999] (acted for plaintiffs for 18mths—Brunei gov investigating Prince, sought to retain same solicitors—had ceased to act | tried to create Chinese walls  not allowed to act—insufficient & ad hoc Chinese Walls only); Flanagan v Pioneer Permanent Building Society at [10] per Dutney J; Gillies v Dibbets; Mallesons v KPMG & Carter (Real and sensible possibility)) • Solicitor has duty not to place himself in a position where there may be an unwitting breach of confidence: Mallesons Stephen Jaques v KPMG and Carter • There is no general rule that a solicitor cannot act against a former client: Rakusen adopted in Fruehauf Finance Corporation Limited v Feez Ruthning; Carindale Club v Astill o ← must look at all the circumstances • Migratory lawyers—generally if possessing confidential information is disqualified from acting against a former client: In re a firm of Solicitors [1995] o BUT can exclude from dealings at the new firm by Chinese walls: Wagdy Hanna v National Library of Aust (2004) • Migratory clients—Relationship established with corporate clients not CEO or directors—can act against them personally: Gainers Inc v Pocklington Examples • No real & sensible possibility if— o action unrelated & effective Chinese walls set up: Fruehauf Finance Corporation Limited v Feez Ruthning (firm proposing to act for bank against coy—previously acted for coy in entirely unrelated action—had confidential information relating to operations & manner of conduct— Chinese walls set up: relief from duty of disclosure | exclude partners involved in previous action | undertakings that firm’s employees would not seek info  no real risk) o external consultant who is not actively participating etc: Potts v Jones Mitchell & Anor (2004) (solicitor allowed firm to take over files—still appeared as consultant on letterhead but no longer played active role— firm acted for Potts=defendant, solicitor acted for plaintiff in proceedings —firm withdrew but solicitor continued to act for plaintiff—seeking to prevent solicitor from acting against them  not really practicing with firm any more—unlikely that information would be passed on → no real possibility → injunction refused) o With lapse of time— (Potts v Jones Mitchell)  Lawyer running file has left  File archived off-site or out of reach of lawyers practicing on file • Real & Sensible possibility where— o Related matter—possibly even where precautions & Chinese walls have been set up: Mallesons Stephen Jaques v KPMG and Louis James Carter (Mallesons prosecuting C=KPMG Partner for offences as auditor—had previously advised C & another KPMG partner on audits—had previously discussed prospect of criminal charges w KPMG—Chinese walls in retainer: relieved obligation to disclose confidential information from KPMG  real & sensible possibility—undertaking & Chinese walls not sufficient) o full knowledge of the other side’s case in divorce proceedings: Legal Services Commissioner v Madden (2008) (6 year delay as solicitor not doing anything—delivered statement of loss & damage without authority of client—paid defendant solicitors costs out of trust account without Andrew Trotter LWB433 Professional Responsibility authority—previously acted for H&W preparing financial agreement | W in redrafting will post-separation | had detailed knowledge of separation from W—acted in FamCt for H—solicitor 50km out of town so limited availability of legal services  proceedings stayed | supervising of solicitor & file ordered) Considerations: Prince Bolkiah v KPMG per Millett LJ • Interests of clients—whether likely to conflict: Village Roadshow v BDW (even where no actual breach of confidence) • Size of firm | number of lawyers—if a small firm, much harder to set up Chinese walls • Time elapsed • Nature of proceedings • Availability of legal practitioners: Legal Services Commissioner v Madden (2008) (solicitor 50km out of town so limited availability of legal services—but less significant considering 6 year delay | delivered docs w/out authority | breach of trust acc | acting for H after acting for W  proceedings stayed | supervising of solicitor & file ordered) • Extent to which info can be effectively separated • Consent of parties (not sufficient in itself): Fruehauf Finance Corporation v Feez Ruthning (Lee J—Can sometimes act against past client if conditions are agreed to by current client and firm) Guidelines for Chinese walls— (Prince Bolkiah v KPMG per Millett LJ) Cannot be ‘ad hoc’ • Provide physical separation (Including dining etc) • Education—to prevent improper & inadvertent transfers • Procedures for crossing the wall o Maintenance of proper records when this should occur • Monitoring by compliance officers • Disciplinary sanctions for breach of the wall Client & Personal Interest Fiduciary duty Must serve client with best efforts—not for own gain: Law Society of NSW v Harvey [1976]; • Appearance of conflict should be avoided: Spector v Ageda • Should not create a personal interest that may conflict: Bonds & Securities v Glomex Mines o Go into business w client or induce them to do so: Law Society of NSW v Harvey (solicitor lending money to clients through corporation—dealt with their real estate— mixed business with clients as solicitor w business in his personal capacity—did not tell to seek legal advice—unauthorised investments  deliberate & dishonest → struck off) o Manage client’s finances: Queensland Law Society Inc v Carberry [2000] (solicitor looking after financial affairs of client—entered into loan, effectively satisfying his own debt to 3P  struck off) o Lend client money: Harvey • Lawyer should decline gifts as consent, independent legal advice etc are impractical: Johnson v Buttress • Fact that transaction at fair value is not conclusive—mere entry into transaction may constitute undue influence: Maguire and Makaronis • Strike off if effectively stealing from client: Queensland Law Society Inc v Carberry [2000] (solicitor looking after financial affairs of client—entered into loan, effectively satisfying his own debt to 3P  struck off) Andrew Trotter LWB433 Professional Responsibility Fully Informed Consent • Fully informed consent generally enough to excuse fiduciary duty: Harvey o Consent cannot be obtained by fraud etc • May not be sufficient—in some circumstances also require independent legal advice: LSC v Podmore (sophisticated client consented—but spoke poor English so had trust in lawyer  independent legal advice also required) Solicitor— • must not— o Allow conflict between client & self or associate: sr9.1.1 o Exercise undue influence get the client to do something for their benefit: sr9.1.2  Except for payment of ordinary legal fees: sr9.1.2 • Duty also applies if benefit gained by associate: sr9.1 • Must cease to act if conflict arises: sr9.2 In particular— • Should not accept large gifts: sr9 (generally) • If instructed to draw up will with substantial benefit to solicitor or practice, must decline to act & offer to refer to another solicitor (not an associate): sr10.2 o Does not apply if client is—  member of immediate family: sr10.2(i)  solicitor in employment relationship: sr10.2(ii) o ‘substantial benefit’ calculated relative to testator: sr10.3 • Cannot borrow money from a client: sr11.1 o Does not apply if client financial institution or government body: sr11.2 o May amount to professional misconduct: Harvey; Re Fabriciu (error made due to inexperience not dishonesty  2 year suspension) Other Business of a Solicitor • Must ensure that other business does not deride ability as a solicitor: sr31.1.1 o Separate records: sr31.1.2 o Disclose interests sr31.1.3 o Cease to act on conflict sr31.1.4 Andrew Trotter LWB433 Professional Responsibility Cases Exceptions to Legal Professional Privilege – Illegal Purpose Kearney v Attorney-General (NT) (1985) 158 CLR 500 • The administrator of Northern Territory was attempting to extend regulations over a large area, in order to prevent an Aboriginal native title claim being made over the area • In discovery, the administrator claimed that legal documents that pertained to the matter were privileged • Held: The documents were not protected by legal professional privilege • Legal documents that are concerned with perpetrating a deliberate use of a statutory power would be against the public interest • You must have a reason for
More Less

Related notes for JSB171

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.