4.2.1 General What is a privilege?
A privilege is a right to resist disclosing communications and documents that could otherwise be ordered to be disclosed in a court or tribunal and relied on as evidence in the adjudication of a dispute. An ADR participant may seek to rely on a privilege to preclude admission into evidence of a communication made (or document created) for the purpose of an ADR process.
Communications and documents that are disclosed in the course of, or created in preparation for, an ADR process may be inadmissible if a party to the ADR process can claim a privilege over the communications or documents, in accordance with the common law or legislation.
Privilege may also apply at a point in time before adducing evidence (eg to resist production of documents before a trial on subpoena/summons, by way of discovery or answering interrogatories).151
What privileges may be relied on to protect ADR communications?
The two main relevant bases that may protect ADR communications from admissibility are:
• without prejudice privilege under the common law, and
• provisions such as s131 of the Evidence Act 1995 (Cth) which, where it applies, displaces the common law in favour of a statutory code.152
Legal professional privilege may have some application to confidential disclosures to an ADR practitioner, but that topic is outside the scope of this Report. It is clear that, if legal professional privilege applies to a communication, it operates as a substantive rule of law
151 Australian Law Reform Commission, Review of the Uniform Evidence Acts – s.13 privilege, Discussion Paper 69, paragraph 13.1.
152 This legislation has been reflected in whole, or at least partially, in state and territory jurisdictions.
which, among other things, precludes evidentiary reliance on a communication (unless the privilege is waived).153
4.2.2 Without prejudice privilege
Without prejudice privilege renders inadmissible oral and written communications (including admissions) made in good faith for the purpose of settling a dispute. Such communications will be inadmissible in subsequent court proceedings, unless consent to the disclosure has been given by both parties.154
Young J offered a formulation of the privilege in Lukies v Ripley (No.2):155
If parties have attempted to settle the whole or part of litigation and if they have agreed between themselves expressly or impliedly that they will not give in evidence any
communication made during those discussions, then public policy makes those discussions privileged from disclosure in a court of law or equity.156
The relevant public policy is that which encourages full and frank participation in good faith attempts to settle a dispute and avoid litigation.
It is generally thought that the privilege applies only to civil proceedings and does not extend to criminal conduct, breaches of certain legislation, such as the Trade Practices Act 1974 (Cth), or representations ‘that are not objectively part of, nor reasonably incidental to, the settlement negotiations.’ 157
Application to ADR of without prejudice privilege – scope and limitations Where participants have entered into an ADR process to negotiate a settlement, then without prejudice privilege may protect from admissibility the confidential information exchanged within, or for the purposes of, that ADR process.
Without prejudice privilege has been expressly held to apply to mediation,158 consistent with the public policy that litigants should be encouraged to settle their disputes.159 There appears to be no basis for doubting the application of the privilege to other ADR processes.
It has also been held that the privilege is available for mediation, and potentially other ADR processes, that aim simply to reduce the ambit of the litigation, rather than being aimed at settling the entire dispute.160
153 It is unlikely that a communication made to an opposing disputant in an ADR process would attract the application of legal professional privilege. While that privilege would apply to communications between a lawyer and client for the purpose of an ADR process, once information is communicated to an opposing disputant – whether in an ADR process, or by filing and serving a statement in legal proceedings, legal professional privilege is likely to cease to apply. See, for example, Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd [2009] FCAFC 32.
154 Field v Commissioner for Railways (NSW) (1957) 99 CLR 285.
155 Lukies v Ripley (No 2) (1994) 35 NSWLR 283.
156 Lukies v Ripley (No 2) (1994) 35 NSWLR 283, 287 per Young J.
157 G Hurley, ‘Mediation where a party represents the Australian Government: are there limits to confidentiality’
(2006) 17 Australian Dispute Resolution Journal 29 at 31.
158 AWA Limited v Daniels (t/a Deloitte Haskins & Sells) (1992) 7 ACSR 463.
159 See Rush and Tompkins Ltd v. Greater London Council (1989) AC 1280.
160 Lukies v Ripley (No 2) (1994) 35 NSWLR 283 at 287 per Young J.
Specific legislation relating to confidentiality in mediation, or indeed any other ADR process, will override common law rules about admissibility.
Courts have considered limitations on, and exceptions to, application of without prejudice privilege to mediation processes which are likely to also apply to other ADR processes.
The privilege only operates to protect oral or written communications made in, or for the purpose of, an attempt to settle all or part of a dispute. It does not attach to the underlying information itself. This distinction between communications, and the information contained in those communications,161 was conceptualised by Rolfe J in Field v
Commissioner for Railways (NSW) and elucidated by McDougall J in 789TEN v Westpac.162 Generally, a party will not be prevented from leading evidence of a fact or matter
merely because it was first learned of during mediation if there is available admissible evidence of that fact or matter which exists independent of the mediation process.163 Parties may therefore follow a line of inquiry about which they learned at mediation, but may not prove an admission or statement made at mediation. For example, if during mediation a party shows another party a document that is not otherwise privileged, then that document does not attract without prejudice privilege simply because it was disclosed during the mediation. What may be privileged, however, is the fact that it was communicated during the mediation.
In Australia, an exception to the privilege exists where a party is seeking to rely on the privilege to escape liability for unlawful conduct. For example, in Quad Consulting Pty Ltd v David R Bleakly and Associated Pty Ltd,164 it was held that notes exchanged at a settlement meeting were discoverable because the notes referred to allegations of deceptive and misleading conduct on the part of the person claiming the privilege.
Further exceptions have been upheld by Australian courts, to allow the admission of evidence:165
• to prove cost determinations166 or that a settlement was reached167
• to prove misrepresentation,168 oppression,169 or unconscionable conduct by a party170
• to have a settlement set aside on grounds of misleading conduct171
161 A distinction drawn also in relation to the protection conferred by obligations of confidentiality: see Chapter 3 (Confidentiality).
162 789Ten v Westpac [2005] NSWSC 404.
163 AWA Ltd v Daniels (t/as Deloitte Haskins & Sells) (1992) 7 ACSR 463.
164 Quad Consulting Pty Ltd v David R Bleakly and Associated Pty Ltd (1990) 98 ALR 659.
165 As set out by N Alexander, International Comparative Mediation: Comparative Perspectives (2009) 270 and A Limbury, ‘Should there be a distinct ‘Mediation Privilege’?’ (2007) LEADR Update, 3. Viewed 10 January 2011,
<www.leadr.com.au/update/update14sept07.htm>.
166 Capolingua v Phylum Pty Ltd (1991) 5 WAR 137.
167 Barry v City West Water Ltd [2002] FCA 1214.
168 Williams v Commonwealth Bank [1999] NSWCA 345.
169 Abriel v Australian Guarantee Corporation Ltd [2000] FCA 1198.
170 Pittorino v Meynert [2002] WASC 76.
171 Quad Consulting Pty Ltd v David R Bleakley and Associates Pty Ltd (1990 –1991) 98 ALR 659.
• where a party issues legal proceedings against their solicitor in relation to professional misconduct, or where defendant solicitors in such cases join counsel and the mediator, seeking contributions as joint tortfeasors172
• to prove admissions or statements relating to criminal conduct173
• where specifically provided for by statue to prove breaches of particular legislation such as the Trade Practices Act 1974 (Cth),174 and
• to lead in evidence representations that are not objectively part of, or not reasonably incidental to, the settlement negotiations.175
Does communication to an ADR practitioner amount to waiver of a privilege?
Waiver is constituted by conduct which amounts to the forgoing of a right to keep certain information confidential.176 Waiver can be express, or can be implied from the participant’s conduct.177 The issue of whether disclosure of legal advice by a disputant to an ADR practitioner constitutes a waiver of the legal professional privilege raises the further issue of whether, after this has happened, the other party may compel the production of such advice in subsequent litigation.178 There has been no conclusive judicial decision on this point in Australia. Some guidance has been given in two cases which seem to suggest that a court would likely find the privilege is not waived where a client discloses privileged information to an ADR practitioner.179 This position is consistent with the public policy of encouraging effective ADR by assuring participants that their full engagement in the process, and with the practitioner, will not prejudice them in subsequent litigation.