Litigation and legal professional privilege
Insolvency practitioners and litigation have long been bedfellows. Unfortunately for the insolvency practitioner, it is frequently the case that they leave a string of correspondence flowing to and from the would-be defendant prior to their commencing legal action against him or her. In such circumstances, it is very easy for the insolvency practitioner to inadvertently waive legal privilege by their own conduct, often scuttling the prospects of a successful verdict.
Even a reference to legal advice in written communication can be fatal. For example in Rich –v – Harrington  FCA 1987, it was held that privilege had been waived where a statement was made that “Our client has acted at all times with the benefit of legal advice and does not believe there has been any victimisation or other conduct for which compensation could properly be sought”.
Of course, clients themselves can waive legal professional privilege. They are very good at it! In Seven Network –v – News Ltd (No 12)  FCA 348, the Court was referred to discovered board papers which contained the statement “Our legal advice is that the risk of damages being awarded against Optus is low”. The Court accepted that these documents disclosed the “gist” or “conclusion” of legal advice and held that there had been a waiver of privilege in the underlying legal advice. Optus was ordered to produce all of the documents containing the relevant legal advice.
It is always a good idea to review all relevant documentation before the case starts to be sure that there is no free lunch available to your adversary. Of course, in large cases this may not be possible.