Federal Litigation and Dispute Resolution

Douglas v Morgan (2019) SASCFC 76

1 July 2019
 

Client legal privilege – for purpose of or in contemplation of litigation

During an action for personal injuries, Amy Douglas (the defendant and appellant) claimed legal professional privilege in respect of an investigator’s report commissioned by Allianz, her insurer, following an incident in which her car had collided with a pedestrian, Laura Morgan (the first respondent). An Allianz officer had deposed that she had sought a detailed account of the accident in order to confirm its circumstances. There was no mention of any intention to provide the information obtained to lawyers or that lawyers wanted the information.
 

Judgment

Blue J (with whom Kelly and Nicholson JJ agreed) concluded that legal professional privilege did not exist in the report because it had not been commissioned by the insurer for the dominant purpose of submission to lawyers for use in any litigation instituted by the first respondent (at [87]). On the evidence adduced, the purpose of obtaining the report for use in potential litigation could not be said to be either the primary or substantial purpose even if that were the threshold. The immediate or primary purpose in requesting the report was so that Allianz could make a determination in relation to liability (at [75]). A secondary or contingent purpose was to provide the report to solicitors in the event that the claim was not determined and resolved by Allianz itself (at [78]).

Given these two purposes, Allianz did not abduce any evidence to prove that the secondary purpose was the dominant purpose (at [83]). Blue J acknowledged that it was not easy to envisage what evidence would be capable of proving that the protected purpose was nevertheless the dominant purpose (at [85]. Even if Allianz had adduced evidence that statistically there was a 90 per cent probability that the first respondents’ claim would proceed to litigation given its circumstances as known to Allianz, this would not necessarily establish that use for the purpose of litigation was the dominant purpose when Allianz still intended to use the report to determine liability and attempt to resolve the claim.
 

Implications

The question considered on appeal was whether an investigator’s report was commissioned by an insurer for the dominant purpose of submission to lawyers for use in any legal proceedings. The Full Court first thoroughly reviewed the law on legal professional privilege (at [41]-[53]) before turning to those privilege cases which involved investigations (at [54]-[61]) and then undertaking an objective assessment of an individual’s intentions and conduct (at [74]). Blue J added in obiter (at [89]) that if there was an independent element of legal professional privilege that there be a reasonable anticipation of litigation eventuating, this element would have been satisfied on the available evidence.
 

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