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Can you Claim Privilege Over Culture Audit Reports?
A Federal Court case explored whether an organisation could claim legal professional privilege over a culture audit report that was commissioned by its legal representative. You can read the case here.
National Australia Bank (“NAB”) received a complaint from one of its employees which included allegations of sex and racial discrimination in the workplace. As a result of the complaint, NAB’s external legal representative (“the external lawyer”) commissioned a culture audit report via a third party, to enable the external lawyer to provide legal advice to NAB about the substantive matter and any other legal risks.
NAB was required to produce the culture audit report as part of the proceedings, but objected on the basis that the report was subject to legal professional privilege.
When is a document privileged?
Legal professional privilege is designed to preserve from disclosure confidential legal communications and documents, prepared for the dominant purpose of legal advice or litigation (read our previous article here for further information).
The “dominant purpose” test is used to determine whether a document is considered as privileged. This means that the document must have been brought into existence for the dominant purpose of obtaining legal advice or litigation in order for it to be considered privileged.
The parties’ submissions
NAB sought to set aside the notice to produce by claiming legal professional privilege over the report. NAB claimed that the external lawyer had commissioned a third party to prepare the report to enable the external lawyer to provide legal advice to NAB about the substantive matter and any other legal risks. NAB claimed that the report’s “dominant purpose” was to assist the external lawyer in providing legal advice to NAB.
The employee argued that the report was not subject to legal professional privilege, but if the Court found that it was privileged, that privilege had been waived because NAB disclosed the report’s findings in a staff update about the steps it was taking as a result of the discrimination complaint.
The employee also claimed that the report had another purpose other than providing legal advice, which included a factual investigation into the matters that were raised, and accordingly, this did not satisfy the “dominant purpose” test.
The Federal Court’s decision
The Court determined that the report was the subject of legal professional privilege and NAB was not required to produce the culture audit report as part of the proceedings.
The Court also noted the following:
- The report’s “dominant purpose” brings within the scope of the privilege a document brought into existence for a client receiving professional legal advice, even if an ancillary use of the document was contemplated at the time.
- The starting point of the “dominant purpose” test is to assess the document’s intended use.
- The focus on the “dominant purpose” test is on the purpose of the person who created the document, or who, had the authority, and did, procure its creation.
It is therefore important for employers to keep in mind that internal company documents may be the subject of public legal proceedings and documents relating to sensitive matters require careful consideration. Sensitive matters may include issues relating to culture audits, workplace investigations, underpayments and claims relating to sexual harassment, bullying and discrimination.
How PCS can help
PCS offers a wide range of services to organisations to ensure they are equipped to navigate behavioural and cultural issues within the workplace. PCS also offers culture audits as part of its services, as well as Behaviour and Culture training, organisational structure reviews and strategic HR consulting packages.
Vanessa Yol, Associate
Other Relevant Resources
31 August 2016