Following a direction from the former Attorney General in late 2006, the Australian Law Reform Commission commenced an inquiry into the application of client legal privilege to the activities of federal government bodies with coercive information gathering powers.

The findings of the year long inquiry, which include 45 recommended changes to the current regime, were tabled in parliament last week in a report entitled Privilege in Perspective: Client Legal Privilege in Federal Investigations.

The inquiry identified over forty federal government bodies with coercive information gathering powers, along with Royal Commissions which can be established when required; all governed by a multitude of different legislation.

According to report, most of this legislation doesn’t specifically deal with the application of client legal privilege, and the ones that do are often inconsistent. This has lead to uncertainty over the powers of these bodies which is now requiring time consuming and costly litigation to clarify.

The Commission’s president, Professor David Weisbrot, said that while there are competing interests that need to be balanced, there is still a general consensus that privilege is a right of central importance that should prevail, other than in extenuating circumstances.

The inquiry found however, that the lack of clear, consistent legislation has resulted in the right being abused in some instances.

“Unfortunately there are cases in which it appears claims of privilege have been used primarily to delay or frustrate investigations — with some disputes taking years to resolve. Many of our recommendations focus on streamlining the process for handling claims of privilege, and deterring or punishing abuses,” he said.

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Accordingly, the report’s primary recommendation is the development of a single piece of legislation covering all aspects of the application of client legal privilege in federal investigations.

“A single federal statute would make it clear that privilege applies unless expressly modified or abrogated by another statute, as well as establishing a system in which regulators and clients would have to operate in a much more open and transparent manner, according to published policies,” said Professor Rosalind Croucher, the commissioner in charge of the inquiry.

The report also recommended extending privilege to tax law advice provided by accountants where that advice is sought by the Australian Taxation Office and introducing a streamlined procedure for resolving privilege disputes. It also proposes a targeted education program to improve lawyer’s understanding of their legal and ethical obligations surrounding privilege, and clarifying and strengthening the disciplinary procedures which would apply in cases where asserting privilege might amount to unethical conduct.