Protecting legal professional privilege in draft expert reports: time to sit on the fence?

Thursday, 16 September 2021

Malone v La Playa Nominees Pty Ltd [2021] VSC 271 

As experts, it sometimes seems that litigation lawyers come in two varieties: those who ensure that no documents (email or otherwise) are ever communicated between expert and lawyer other than a final report (seemingly to protect legal professional privilege) and those who believe it will all work out in the end, so don’t worry about it. There are rarely those who sit on the fence. But thinking in such absolutes may not result in the outcome parties are hoping for, and not being able to prove a draft was communicated may mean no privilege is found.

This article looks at a recent decision in the Supreme Court of Victoria, Malone v La Playa. It was found that a draft report prepared by an expert witness which was communicated to their instructing solicitors was privileged, whilst another version of the draft report, which was not communicated, was not privileged. We also look at the reasons set out in the judgment for and against finding privilege in respect of a number of types of documents.

The issue 

The plaintiff and defendant were the respective owners of No 6 and No 8 Shandford Avenue, Brighton. A fence divided their property. The fence was a combination of brick, concrete and wire mesh. Mr Racovalis and his company were engaged by the defendant to renovate No 6, and this include works on the fence in 2017 and 2018. A dispute arose. 

The plaintiff intended to call Mr Racovalis as a lay witness to give evidence on what actually happened when he was was asked to rebuild the fence. The plaintiff also sought to rely on an expert report provided by Mr Racovalis to give evidence on the likely history of the original fence’s construction.  

Mr Racovalis provided an expert report in October 2020. In November 2020, the defendants issued a subpoena on Mr Racovalis for various document categories including “all correspondence… relating to the [No 6 or No 8]”. This captured a number of draft reports prepared by Mr Racovalis. Objections on grounds of privilege were filed by the plaintiff’s solicitors, which were eventually narrowed to a set of documents in a Disputed Documents List. 

General principles 

Justice Matthews firstly addressed whether common law principles of privilege applied or the Evidence Act. She found common law principles applied given it was not the expert (i.e., the person to whom the subpoena was issued) who objected to the provision of documents, but the plaintiff’s solicitors. 

She then referred to eight principles, taken from Asahi Holdings^_1. 

The Disputed Documents List 

In her judgment Justice Matthews classified the documents in dispute into four groups, and made the following findings: 

 

Type of document	Outcome	Summary of rationale
Emails relating to the subpoena to produce documents	Not privileged	Relevant principals do not “extend to all communications with a potential witness”, and these documents “do not go to Mr Racovalis’ evidence or potential evidence”
Stand-alone draft expert reports (i.e., not attached to emails)	One privileged, one not privileged	There was evidence of one version being communicated to lawyers (which was privileged), and no evidence for the other (which was not found to be privileged).
Email regarding engagement of another expert required to generate 3D images	Privileged, but waived	The email “goes to what [the other expert] was asked to do, and therefore is a document that may be said to influence Mr Racovalis’ Report”.
Email included as an attachment in expert report	Not privileged, but in any event waived	Privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report.

 

In respect of the stand-alone draft reports, Justice Matthews reached the conclusion regarding privilege based on evidence of communication. For experts (and those briefing them), this indicates: 

1. Draft reports which are prepared but never communicated are likely not covered by legal professional privilege. 
2. The evidence of communication does not need to be an email. For one of the documents in this matter the plaintiff’s lawyer provided evidence of communication by way of affidavit.  
3. The onus is on the party claiming privilege to establish the dominant purpose and/or communication.  

Conclusion

This judgment continues to show the potential complexity of privilege rules on even a claim which on its face does not appear complex.  

Seeking to avoid all written communications with experts, ostensibly to avoid creating a ‘paper trail’ that could be used for cross examination, may potentially increase the risk that privilege will not apply to draft reports created by experts as there will be little evidence of communication.

We suggest that solicitors should consider upfront discussions with experts regarding the creation and communication of documents to avoid inadvertent waiver of what would be otherwise privileged communications. It is also a good idea for experts and lawyers to agree on the proper actions to take place should an expert receive a subpoena. These are, after all, legal issues.  

The above suggests that when dealing with experts a compromise is needed to balance the perceived risks of discovery of written communications and a blanket ban of those communications. At the very least, records should be kept of when a document was not provided but its contents were communicated, whether that was in person, over the phone or via a Zoom call.

_{[1]  Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Limited (No 4) [2014] FCA 796}