Confining an evasive genie: Maintaining privilege over expert reports

Litigation privilege is a potent, yet elusive, mystical creature. At its core, it is a robust force. It is a well-settled immunity exempting the non-disclosure (and safeguarding the confidentiality) of communications made in connection with the provision of legal services for the conduct of actual, or anticipated, litigation.

Privilege grants full and frank conversations between clients and their solicitors, including discussions involving third parties (such as experts), leaving clients without apprehension that they might be prejudiced by subsequent compulsory disclosure of the exchanged communications (see Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49). Yet, it may only be a matter of seconds when one inadvertently waives privilege, and it no longer holds its power. In a flash, the power evaporates into thin air, never to be seen, or relied upon again. As the High Court put it, “the genie cannot be returned to the bottle” (Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd [1996] HCA 15). Once lost, the privilege cannot be retrieved.

The main thing to determine when assessing whether a confidential communication or document attracts privilege, is whether it has been produced for the ‘dominant purpose’ of providing legal advice or professional legal services with respect to actual or anticipated legal proceedings (see sections 118 and 119 of the Evidence Act 1995 (NSW)). The doctrine of privilege considers that a person has (impliedly) waived privilege where their conduct does not accord with the preservation of confidentiality over the material. The test is governed by notions of fairness and invigorates the question: is it unfair for the holder of the privilege, in light of their conduct, to maintain the privilege?

The question of whether privilege has been waived can be precarious in the litigation context with respect to expert reports. The confidential briefing of an expert, documents provided to an expert and lawyer’s file notes prepared in the course of discussions with an expert and a client will generally attract legal professional privilege. However, the later disclosure of an expert report, in the course of litigation, will typically catalyse an implied waiver of that privilege.

Draft reports can be a little trickier. Generally, draft reports generated unilaterally by an expert for the primary purpose of the preparation of the final report itself (i.e. drafts that do not expose communications with the lawyer but rather record the evolution of the expert’s views as they formulate their opinion) will not attract privilege. However, a draft report, that is prepared for the purpose of being provided to a lawyer for their review and comment, will likely attract privilege. This is because the expert is typically briefed for the ‘dominant purpose’ of providing advice to the lawyer who has engaged the expert for the purpose of anticipated or ongoing litigation.

Finally, even where a draft report does not attract privilege, annotations on the report might. Privilege may apply where the annotations reflect the expert’s understanding of matters based on communications with the solicitor (Australian Securities and Investments Commission v Southcorp Ltd (2003) 46 ACSR 438).

By and large, serving a report from an expert witness will amount to an implied waiver of privilege over communications between a lawyer and expert, including the letter of instruction and briefing materials. At this stage, privilege cannot be maintained over documents that the expert has used to form their opinion or prepare their report. The rationale for this is if a party refers to, or relies on, an expert report that it has disclosed, it is only fair that the other parties are be able to access the material which influenced the contents of the report (see, e.g Australian Securities and Investments Commission v Southcorp Ltd (2003) 46 ACSR 438). Put another way, it would be unfair for a party to rely on a report they have procured without the disclosure of the materials said to have influenced its contents. The act of disclosing the report triggers an implied waiver of its associated material as withholding information or communications that underpinned the report would be inconsistent with the disclosure of the report (New Cap Reinsurance Corporation Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258). However, in the course of briefing experts, it can be easy to overlook whether legal professional privilege is being lost over communications and materials that would otherwise be privileged, and sometimes the answer is not clear-cut.

Here are some practical tips for preserving privilege when commissioning expert reports:

• Speak with the expert by a teleconference to gauge their views before asking them to put pen to paper. This will reduce the prospects of needing to produce draft reports for inspection which may raise matters that do not accord with the position in the final report.
• Cautiously consider the material that you wish to brief an expert with. To the extent possible, avoid briefing an expert with privileged materials, such as draft statements. Privilege may be lost where an expert relies on a particular document or communication in formulating their opinion.
• Assume that the service of an expert report may result in the waiver of privilege over communications with experts, which may become discoverable in the relevant proceeding (see Pierides v Monash Health [2017] VSC 342, [58]). Where possible, include assumptions with instructions that the expert may then refer to in the report.
• Include instructions with the brief of materials to ensure that privilege is preserved at least until the final report is issued and relied upon in the proceeding.
• Ensure the provision of instructions to an expert is separate from other forms of privileged communications with the expert.
• Let the expert know that internal working documents, such as working notes or field notes, may be subject to waiver and it would be helpful to minimise the preparation of material to what is strictly necessary to facilitate the formulation of the expert’s opinion. However, never ask an expert to destroy a working document as this may amount to a contempt of a party’s discovery obligations and even professional misconduct.
• Ask the expert not to prepare ‘draft reports’ as working documents for their own purposes but rather prepare ‘draft reports’ for the purpose of sharing such drafts with their lawyers. Moreover, ask that the expert share any draft report under the cover of a separate email chain that clarifies that the draft is being shared for the purpose of the solicitor reviewing, commenting and/or settling the draft.
• When commenting on any draft report, any written feedback should be confined to matters of form. If wishing to test any conclusions reached, this should occur by phone or audio-visual link. There is nothing improper about a solicitor communicating with an expert. However, in line with their ethical obligations, the solicitor should not use this as an opportunity to seek to interfere with the expert’s independence or to covertly pressure the expert to alter their views.

Ultimately, an inadvertent waiver of privilege can severely prejudice a client’s case, and solicitors ought to exercise caution, particularly throughout the course of litigation. At the end of the day, it is far less arduous to keep a genie captive rather than re-capture a genie that has been emancipated.