Litigation, Civil Procedure, Discovery of Documents - Essay Example

LITIGATION, CIVIL PROCEDURE, DISCOVERY OF DOCUMENTS THE PROBLEM: The client company, Globtex, operating an oil refinery and chemical processing plant, close to an established residential area in outer Melbourne. Local residents are trying to force Globtex to cease any activities that result in toxic fumes polluting the air and causing the health problems, especially asthma, to the residents. Reportedly, the asthma rate in children and adults living near the refinery is 12 times higher than the national average. The local community legal centre has commenced a test case against Globtex in which the Plaintiff seeks damages for severe asthma. The client company, over the last decade, has obtained reports and studies which confirm that there is a link between the toxic fumes and the increasing rate of asthma in the local residence. The problem concerns to devise a strategy so these reports and documents may not be not available to the plaintiff. STRATEGY: As evident from the above problem, the main concern of the company is that these reports and documents should not be available to the plaintiff for proving the allegation against the company. This can be done by adopting the strategy of ‘Retention of the Documents’ and by the privilege. The case of Rolah Ann McCabe v British American Tobacco Australia can serve as a guideline to adopt these strategies as the said case demonstrated successfully that through these strategies documents harmful to the company mighty be retained (destroyed) or declared privileged so the plaintiff or the court may not require these documents to exhibit for inspection, to avoid any legal ruling. These policies are discussed below separately to view their implications and results. Let us begin with examining the case of McCabe v. BATAS in brief and the strategies adopted. Rolah Ann McCabe v British American Tobacco Australia: The fifty-one year old plaintiff had lung cancer which she alleged had been caused by smoking the defendant’s cigarettes over approximately four decades. She sued the defendant for damages arising from the defendant’s negligence related to the marketing and sale of their cigarettes. The trial judge ordered that the defence of the defendant tobacco company be struck out and that judgment be entered for the plaintiff. He criticized the defendant for its failure to comply with discovery orders that had been made during the proceeding. BAT was unable to comply with this court order to produce documents because it had over a period of years prior to Mrs. McCabes’s action destroyed large quantities of documents. These documents had been destroyed pursuant to what the company called a document retention policy. The trail judge found that the so-called document retention policy was in fact a document destruction policy intended to ensure that the document would not be available for use in any future litigation against the company. The trial judge also found that as a result of the defendant’s pre-commencement destruction of documents, the plaintiff had been deprived of the possibility of a fair trial. BAT appealed successfully. The Court of Appeal ruled that destruction of documents prior to commencement of legal proceedings could only result in striking out the destroyer’s claim or defence if the destruction amounted either to an attempt to pervert the course of justice (or, if open, contempt of court) (British American Tobacco Australia Services Limited v. Cowell (as representing the estate of Rolah Ann McCabe, deceased) [2002] VSCA 197, para, 173). 1. DOCUMENT MANAGEMENT POLICY: Legal advisers for BAT played a central role in the development of the company’s document management policies and strategies. The trial judge stated: “I have no doubt that the document retention policy which was put in place did have some quite legitimate management and administrative purposes and benefits, and the documents contained much material relevant to such functions. I am, however, entirely satisfied that the primary purpose of the development of he new policy in 1985 and subsequently was to provide a means of destroying damaging documents under the cover of an apparently innocent house-keeping arrangement. When regard is had to the background material relating to the origins of the new policy, and the critical role played by litigation lawyers in its development and implementation, it is clear that the post-1985 policy (and explain their attempts to disguise the fact) that the Document Retention Policy was primarily directed towards the risks of litigation”. The Court of Appeal disagreed with the trial judge on this point. In their view there was nothing about either the defendant’s document management policies or the participation of lawyers in the preparation and implementation of those policies which suggested that the true purpose of the policies was to facilitate destruction under ‘ an apparently innocent house-keeping arrangement’. (British American Tobacco Australia Services Limited v. Cowell, paras. 71-109). The law firm defending the BATAS also gave advice as to other strategies, including the enhancement and expansion of claims of legal professional privilege, with the same objective of minimising the prospect of any plaintiff gaining the benefit of damaging documents. The document retention policy was introduced on the 30th December 1985 at a time when the tobacco companies in Australia anticipated the possibility of product liability litigation, although no case had actually been brought against any company. Clayton Utz had previously been instructed to take steps to prepare the Industry, and Wills in particular, for litigation. One of their first actions was to review the document retention policy of the Company. In accordance with the Company’s Document Management Policy, destruction of documents is prima facie lawful as it is not against any law or rule in Australia and in that sense, the Wills could do what it liked with its documents. However, destruction must not conflict with statutory requirements as to the retention of certain documents for certain periods. Clayton Utz also advised to get rid of the documents so the plaintiff rely on verbal evidence of people who used to handle such documents. 2. DOCUMENT POSSESSION POLICY: Part 23, Rule 10 of the Supreme Court Rules provides that the Court may order a party to produce for inspection documents that appear, from the list of discovered documents, to be in its possession, custody or power. Accordingly, such production order will not be required in absence of this possession of the documents. This policy was applied by Claton Utz in the case of McCabe v. BATAS that where possible relevant documents would not be held under the possession, custody or power of the defendant but would be held by Clayton Utz or by other bodies or organisations, so that such documents would not be discovered in any proceedings. The contention by Clayton Utz that documents would not have to be discovered in those circumstances was disputed by Mallesons, which contended that such documents were discoverable, but Clayton Utz has maintained its position. Documents held on the Clayton Utz data base which would be relevant to issues in this action have not been discovered and the defendant contends they are not discoverable. THE PRIVILAGE: A privilege is the right to resist disclosing information that otherwise be ordered to be disclosed. The policy to declare documents as privileged can help the enterprise by not disclosing the documents to the plaintiff or to the Court. The rationale for the creation of the privilege is the enhancement of the administration of justice by promoting free consultation and disclosure between clients and lawyers, and assisting in the production of information in litigation.1 On balance, this freedom is considered to outweigh the alternative benefit of having all information available to facilitate the trial process. In Baker v Campbell, Deane J described legal professional privilege as ‘a fundamental and general principle of the common law’.2 The protection only applies where it is intended for a proper purpose — communications made in furtherance of an offence or an action that would render a person liable for a civil penalty are not protected.3 In civil litigation the party may claim the privilege as part of the interlocutory (of a decree or judgement given provisionally during the course of a legal action) discovery process. In such process the party is required to identify the document in its affidavit or list but may make a claim that it is “privileged from production” to the party requiring discovery1. Likewise, where a party is served with a notice to produce under Rule 29.10, it is not required to produce the document where privilege is claimed. A claim for privilege may also be made to prevent production to the Court upon subpoena2 or upon notice to produce3. In any such case the person to whom the subpoena is addressed or the party receiving the notice to produce may object to production to the Court on the ground of privilege. Section 119 allows a ‘litigation privilege’, protecting confidential communications between a client and another person, or a lawyer acting for a client and another person, or the contents of a confidential document that was prepared for the dominant purpose of a client being provided with legal services related to an Australian or overseas proceeding or anticipated proceeding in which the client is or may be a party. The ALRC considered that confidential communications between a lawyer or client and third parties are a part of adversarial litigation and therefore should also be protected by client legal privilege.4 Legal professional privilege at common law can be claimed in civil proceedings at the interlocutory stage, during the course of a criminal or civil trial, and in non-judicial proceedings.5 It is the clear position of the courts in Australia since Baker v Campbell6 that legal professional privilege is a fundamental right that applies both to court and administrative and investigative proceedings. The Commissions’ view is that, in the interests of clarity and uniformity, the client legal privilege sections of the uniform Evidence Acts should be extended to apply to these pre-trial contexts, as currently regulated by the common law rules of legal professional privilege. The common law privilege against self-incrimination entitles a person to refuse to answer any question, or produce any document, if the answer or the production would tend to incriminate that person.7 Although broadly referred to as the privilege against self-incrimination, the concept encompasses three distinct privileges: a privilege against self-incrimination in criminal matters; a privilege against self-exposure to a civil or administrative penalty (including any monetary penalty which might be imposed by a court or an administrative authority, but excluding private civil proceedings for damages); and a privilege against self-exposure to the forfeiture of an existing right (which is less commonly invoked). In November 2002, the High Court allowed Daniels’ appeal, unanimously overturning the decision of the Full Court of the Federal Court. The High Court held that s 155 does not abrogate legal professional privilege, and a corporation and its solicitors may refuse to produce documents that are validly the subject of a claim for legal professional privilege. However, there are some points which must be kept in mind while marking a document as ‘privileged and confidential’. The document must also be treated as confidential if privilege is to be maintained. “Legal Professional privilege” can easily be waived if communication to and from lawyers are not treated with care. If privilege is waived it means the document is not longer protected and would need to be disclosed in connection with legal proceedings. Once waiver has occurred ti cannot be retrieved. Further, communications between in-house counsel and the corporation will be protected by legal professional privilege if: They are made for the dominant purpose of providing or receiving legal advice or carrying on actual or anticipated litigation There exists an independent professional relationship of legal adviser and corporation as client The in-house counsel is qualified to practice law and subject to the professional and ethical duties expected of a legal practitioner in the relevant jurisdiction. Moreover, the schizophrenic nature of practice for in-house counsel requires the exercise of great care if a claim or assertion to entitlement to legal professional privilege is to be preserved. Where in-house counsel has duties in another capacity within the corporation, it is extremely important to distinguish those other roles. In this regard, counsel should insist on having separate titles distinguishing their in-house counsel and other roles. It is also imperative for preserve a claim for privilege that in-house counsel render their advice and otherwise act independently in their capacity as legal advisor. Another strategy might be to advise of the likely saving in the nature of penalties and legal costs if the risk associated with the contemplated conduct is not undertaken. One way to assist in establishing the independence of in-house counsel is to include an independence clause in the in-house counsel’s employment contract. Such a clause would state that the in-house counsel’s ethical duties and duties to the court prevail over their duties to the client. These issues of capacity and independence are important and practical requirement and must be satisfied in order for a claim of privilege to be made. CONCLUSION: From the above discussion, the following points may be summed up to adopt the policy towards maintaining the confidentiality of the documents and reports that may prove harmful to the Globtex if the plaintiff gets these reports for trial: 1. Document Management and Retention Policy may be adopted to spring-clean and get rid of the unwanted documents. This policy was demonstrated in the McCabe v. BAT case in which the British America Tobacco Australia Service who destroyed its thousands of documents which might otherwise be prove against it. However, this practice needs great caution keeping in view the remarks of the trial judge of the McCabe v. BAT who remarked, “I am, however, entirely satisfied that the primary purpose of the development of he new policy in 1985 and subsequently was to provide a means of destroying damaging documents under the cover of an apparently innocent house-keeping arrangement”. Although his ruling was overturned by the Court of Appeal, yet it has invoked new dimensions of arguments. 2. Document Possession Policy may do well as it has been applied successfully by the counsel for BAT Mr. Claton Uts. The court may not ask to produce a document which is not in the possession of the firm or company, hence, if by the document possession policy, the relevant documents are kept with someone other than the company, the Court may not compel the defendant to produce these. 3. The Privilege Policy may help to protect document from disclosing to the plaintiff and the Court. However, great care must be exercised to maintain the status of the privileged and confidential documents as there privilege is most likely to be challenged in the respective Court. Read More