Only KPMG can lift privilege on its lawyers’ advice, inquiry told

The evidence from Allens and Ashurst to the Parliamentary Joint Committee on Corporations and Financial Services on Friday made client legal privilege the defining issue of an inquiry into whistleblower allegations that KPMG personnel accessed and misused confidential client documents, including material belonging to Lendlease.

Pressed to produce their letters of engagement, the firms declined, saying those matters were “subject to the client’s privilege” and so a question for KPMG. Paul Jenkins, Global Chief Executive Officer at Ashurst said it faced “competing obligations” — a duty to assist the committee, but also an obligation “to the court to honour legal professional privilege” — and that it would be “up to KPMG to release that privilege, and it’s not for their lawyers to release.” Chair Senator Deborah O’Neill captured the impasse with a metaphor the witnesses accepted: the documents sat in a locked box and only KPMG held the key; all it had to do was “open the box and let the Senate see.” Both firms confirmed KPMG was their client, that only the client could waive privilege, and that KPMG had instructed them it would not.

The doctrine, in practice

The exchanges were a live demonstration of the position the Law Council of Australia set out earlier in the week, when it warned against a “public misapprehension” that privilege claims made in response to regulators are “inherently scandalous and against the public interest.” “That is wrong,” it said. Client legal privilege, it noted, is a substantive common law immunity that belongs to the client, not the lawyer; only the client can waive it; and it can be displaced by statute only where Parliament has done so expressly or by necessary implication — “broad legislative framing or regulatory inconvenience is not sufficient.” Whether a communication is privileged is a question for the courts, it added, “not public commentary or other external pressure.” O’Neill has argued the privilege “runs out at the Senate door.”

The firms distance themselves from KPMG

While holding the line on privilege, the firms moved pointedly to separate their work from how KPMG had characterised it. Ashurst stressed it “was not asked to conduct, nor did it conduct an investigation of the allegations” — it had given discrete legal advice only. The point sharpened when the committee produced an email from a KPMG independent director to the whistleblower, dated 25 November 2024, stating that an external investigation “had already commenced” and directing him to Ashurst solicitor Jane Harvey — months before Harvey was engaged in January 2025. The statement, she confirmed, “was not correct,” prompting a senator to declare: “This committee has been misled.”

The friction grew when Labor MP Tania Lawrence put it to the firms that KPMG had blamed a “lack of rigor” in their work for once-unsubstantiated findings now being substantiated. Citing privilege, the firms would not engage the specifics, but rejected any suggestion their work fell short. Jenkins emphasised that Ashurst stood by their advice “absolutely” and had acted with “diligence, seriousness, and rigor.” Richard Spurio, Managing Partner at Allens also confirmed that Allens’ most recent engagement, in late March 2026, came only after O’Neill’s 24 March Senate speech, which it accepted was “the catalyst” for the fresh instructions.

Privilege across forums

KPMG’s privilege claim reaches beyond the committee. Chartered Accountants Australia and New Zealand told the inquiry its disciplinary investigators had still not received the Allens and Ashurst material underpinning KPMG’s assurances — “I don’t believe so, Senator,” chief executive Ainslie van Onselen said — despite writing to the firm on 31 March. CA ANZ had been told on a 25 March call that the allegations were “thoroughly investigated and were all entirely unsubstantiated,” a conclusion KPMG attributed to its external firms. Asked whether KPMG had claimed privilege to withhold that material from the accounting body, van Onselen said she would take it on notice. The committee also heard ASIC has issued notices to KPMG, which intends to claim privilege over much of its investigation material.

Van Onselen called the underlying conduct “extremely serious” and the confidentiality of client documents “non-negotiable” under the accounting code, APES 110. Former chief executive Andrew Yates, who resigned on 27 May, conceded the sharing of a client document “was inappropriate,” while maintaining the situation was “more complicated” than revenue overriding ethics.

For the legal profession, the day distilled a question that usually stays within the courts: whether the privilege protecting every client’s confidential dealings with their lawyer can hold under the combined pressure of a Parliamentary committee, a regulator and a disciplinary body or whether, as the Law Council put it, its importance will be “lost in the noise of any particular dispute.”