AWB: Scope Of The ‘Fraud Exception’ To Legal Professional Privilege

In the recent case of AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 5) [2006] FCA 1234 (AWB case), among other things, Justice Young considered the scope of the ‘fraud exception’ to legal professional privilege.

Justice Young held that 10 documents over which the Australian Wheat Board (AWB) claimed legal professional privilege were not privileged as a consequence of the fraud exception.

Justice Young’s reasoning confirms that the fraud exception to legal professional privilege encompasses fraud, criminal activity and actions taken for illegal or improper purposes, and also extends to ‘trickery’ and ‘shams’.

The AWB case serves to clarify the scope of the fraud exception to legal professional privilege, and may have the effect of broadening the application of the fraud exception.The case further illustrates the need for lawyers (including in-house lawyers) to be vigilant about the circumstances in which privilege is sought to be utilised.