In the world of litigation and legal advice, few doctrines carry as much weight or mystique as legal privilege. It’s the quiet powerhouse of the legal system: a rule that shields communications, safeguards confidentiality, and empowers clients to speak freely with their lawyers. It’s a curious creature, acting as both sword and shield, and while it can be somewhat easy to understand at a theoretical level, applying its rules can be challenging.
The rules regarding privilege in New Zealand are governed by the Evidence Act 2006, specifically part 2 subpart 8. There are also rules regarding privilege in respect of discovery in chapter 13 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
What is privilege and what are the types of privilege?
If a document, information, opinion or correspondence is privileged, the person who has “privilege conferred” on that document or information has the right to refuse to disclose it in a legal proceeding.[1]
The purpose of privilege is to allow a person to consult with their lawyer in confidence, and with the assurance that what is told to a lawyer in confidence will not be revealed without their consent.[2]
There are three main types of privilege
- Solicitor-client privilege (also called privilege for communication with legal advisors).[3]
- Litigation privilege (also called privilege for preparatory materials for proceedings).[4]
- Settlement privilege (also called without prejudice privilege or privilege for settlement negotiations.[5]
Solicitor-client privilege
Broadly, solicitor-client privilege covers all communications between a lawyer and client that were intended to be confidential and were made for the purpose of the person requesting/obtaining legal services or the lawyer giving such services to that person.
Litigation privilege
Litigation privilege covers communications or information received, compiled or prepared for the dominant purpose of preparing for a proceeding or an apprehended proceeding, if the privilege holder has reasonable contemplation (a real likelihood or probability, not just a mere possibility) that they will become a party to the proceeding.
They don’t have to have made a formal decision to commence or defend the proceedings for the communications/information to have privilege conferred.
The prospect of the apprehended legal proceedings must be the dominant purpose for which the information or communications were prepared. It does not matter if there are multiple purposes, so long as preparation for litigation was the dominant one.
Settlement privilege
Settlement privilege covers communications between parties or their representatives (or mediators) in a dispute if the communication was intended to be confidential and it was made in an attempt to settle or mediate the dispute between the parties.
This is to allow the parties to explore the possibility of settlement outside the Court, but without prejudicing their right to pursue to defend the claim in the litigation.
What is the difference between confidentiality and privilege?
Confidentiality refers to an ethical or contractual duty to keep information private and not disclose it without consent. This duty applies broadly to all information shared within a professional relationship, regardless of its purpose. It can sometimes be overridden by law or consent. Privilege protects certain communications from being disclosed in legal proceedings, and it is not required to be disclosed unless certain exceptions apply (or privilege is waived).
What is the effect of waiving privilege and who can do it?
Who can waive privilege?
The basic rule is that only the privilege holder is entitled to waive privilege. However, consent for waiver of privilege covering settlement negotiations must be obtained by all parties.[6]
How is privilege waived?
Privilege can be waived either expressly or impliedly and occurs when the privilege holder voluntarily produces/discloses or consents to the production/disclosure of any significant part of the privileged communication, document, information or opinion (Privileged Information), in circumstances that are inconsistent with a claim to confidentiality. [7]
Principles of implied waiver [8]
- If the privilege holder relies on the existence of the privileged material to justify taking a cause of action (e.g. citing legal advice or advice from a third party), the content of the advice may not be spelled out but the implication of what it was is clear.
- Where a party’s use of privileged material destroys its confidentiality, the privilege will be treated as impliedly waived, even if that was not the party’s actual intention.
- Whether a “significant part” of privileged material has been waived will depend on the substance rather than the quantity of the material that is disclosed.
- In Equiticorp Industries Group Ltd v Hawkins, the plaintiffs sought to prove their belief of their lawfulness of their actions by reference to a legal opinion, without disclosing that legal opinion. That was treated as an implied waiver of privilege over the legal opinion.
- However, the High Court and Court of Appeal have recognised that a bare reference to obtaining legal advice will not amount to an implied waiver. It goes without saying that a person would usually have brought a legal proceeding on the basis of having obtained legal advice to support the action.[9]
- It seems that whether privilege is impliedly waived by reference to the legal advice depends on how much of the content of the advice is revealed. Plainly referring to legal advice being obtained should not amount to an implied waiver of privilege, where the privilege holder makes their own decision as to the course of action to be adopted.
- A party cannot seek to rely on a privileged document and inject the substance of the communication (i.e. justifying acting in a particular way) in evidence but seek to shield the advice itself from disclosure.[10]
- Disclosure of the existence of a privileged document as distinct from its contents will not normally amount to an implied waiver.
- Deliberate disclosure of a complete copy of the privileged document will amount to a waiver.
- Deliberate disclosure of some of the content of the privileged document will not necessarily amount to an implied waiver but may do so.
- The test to be applied is whether in all the circumstances the conduct is inconsistent with maintaining the confidentiality of the privileged material in a way that would lead to injustice if the privilege is upheld.
Inconsistent with a claim to confidentiality
It is possible to voluntarily disclose privileged information without waiving the privilege, where the disclosure of privileged material occurred in circumstances consistent with a claim to confidentiality.
For example, in Body Corporate 191561 v Argent House Ltd,[11] disclosure occurred to the defendant who happened to be the owner of at least one of the units in the development. As an owner, the defendant was entitled to see the class of documents into which the privileged material fell. Therefore, while the documents were disclosed to the defendant which was inconsistent with a claim to privilege, this did not occur in an instance that was “inconsistent with a claim to confidentiality”.
[1] Evidence Act 2006, section 53.
[2] Mahoney on Evidence: Act and Analysis, paragraph EV54.01.
[3] Evidence Act 2006, section 54.
[4] Evidence Act 2006, section 56.
[5] Evidence Act 2006, section 57.
[6] Evidence Act 2006, section 65(5).
[7] Evidence Act 2006, section 65(2).
[8] Houghton v Saunders [Privilege] (2009) 19 PRNZ 476 (HC) at [55].
[9] Ophthalmological Society of New Zealand Inc v Commerce Commission [2003] 2 NZLR 145 (CA) at [27]; Minister of Education v H Construction North Island Ltd [2017] NZHC 3147 at [28].
[10] Astrazeneca Ltd v Commerce Commission (2008) 12 TCLR 116 (HC) at [39].
[11] Body Corporate 191561 v Argent House Ltd (2008) 19 PRNZ 500.
