LCA partners with ATO to develop ‘balanced’ LPP protocol

LCA partners with ATO to develop ‘balanced’ LPP protocol

29 July 2019 By Emma Ryan

The Law Council of Australia and the Australian Tax Office have confirmed they are working together to develop a new protocol tackling legal professional privilege claims.

The new protocol aims to provide a balanced framework for legal professional privilege (LPP) claims, while at the same time avoiding unnecessary and protracted disputes over such claims.

According to a statement from the LCA, the protocol will provide a set of guidelines for managing claims to LPP in response to information requests from the Commissioner of Taxation, including what information should be provided to the ATO concerning the claim and context in which it has been made.

In its statement, the legal body noted an “important balance” must be struck between providing the commissioner with the information and materials he is entitled to under law and the “preservation of the confidentiality of communications between taxpayers and their lawyers that the community is entitled to have respected through the long-established LPP doctrine”.


“Finding this balance is difficult and the protocol will provide a framework for lawyers when dealing with information requests from the ATO, some of which potentially capture a very large number of documents and emails,” the LCA statement read.

Commenting further, LCA president Arthur Moses SC said clarification is required for all concerned.

“The Law Council has also raised concerns with the ATO about parties not being provided sufficient time to respond to information requests, which the protocol may help overcome,” he added.

“… Most people and corporations genuinely attempt to fulfil their legal obligations and lawyers play an important role in enabling them to do this by advising on relevant obligations and helping detect and address potential and actual breaches.

“It is essential ATO statements do not result in a chilling effect on the client-lawyer relationship. Incursions against privilege could have a deleterious impact, by impairing the trust and confidence a client would otherwise have.”


The protocol comes four months after the ATO first promised to crack down on the misuse of LPP as a means to hold large market taxpayers to account, causing a mixed response from the legal profession and the tax industry.

“The ATO has assured the Law Council it was not its intention to undermine the sanctity of LPP or to impugn the motives of lawyers seeking to raise legitimate claims in good faith to protect the rights and interests of their clients. I have accepted those assurances,” Mr Moses said.

“LPP is a fundamental protection and pillar of the Australian legal system, with the chief purpose of facilitating the administration of justice. This means clients must be able to communicate freely and frankly with their lawyer, so that they can receive full and proper advice.

“LPP also promotes compliance with the law. Since lawyers owe a duty to the court and serve the administration of justice, they are required to encourage clients to obey the law.”

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LCA partners with ATO to develop ‘balanced’ LPP protocol
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