The increased danger of ‘reply all’: a warning for in-house counsel

Privilege is an important legal right but it is also very easy to waive.

In an era in which regulators are frequently demanding delivery of thousands of documents from organisations, maintaining privilege over legal advice is more important than ever.

Email chains that evolve from having a legal purpose to having a non-legal (or mixed) purpose may now result in a waiver of privilege of legal advice contained in the chain.

The courts may now treat a communication to multiple recipients as separate (and multiple) communications, increasing the risk of a waiver of privilege.

In-house counsel (and those who seek their advice) need to carefully consider who to address their emails to and should consider starting a new email chain rather than forwarding lengthy chains to multiple colleagues.

New legal ground for Australia

TEC Hedland Pty Ltd v The Pilbara Infrastructure Pty Ltd[1] represents the first time that an Australian court contemplated whether multi-addressee communications (in this case, emails) should be considered separate communications. The court held that in some circumstances, a single email to multiple recipients should be considered as separate communications between the sender and each recipient.

If this occurs, the number of potential ‘documents’ responsive to notices from regulators (e.g. ASIC) will greatly increase, as will the possibility that an organisation could inadvertently waive privilege over a communication containing legal advice.

In-house counsel need to consider the purpose of each communication. If there is a chance that an email has a mixed purpose (e.g. to instruct a lawyer as well as a commercial employee), they should take steps to satisfy the dominant purpose test and ensure the privilege of their response is preserved. We explore some possible preventative steps below.

The relevant facts

The dispute in the case arose from a power purchase agreement between the parties.

The court was required to consider the status of certain documents over which the Pilbara Infrastructure (TPI) had claimed privilege. Most of the documents were multi-addressee emails either addressed or copied to TPI’s in house counsel (and others).

No Australian court had previously considered whether multi-addressee emails should be considered separate communications.

The Court followed the approach adopted in a recent case in the English Court of Appeal[2], namely:

• when considering a multi-addressee email, including a lawyer, identify the purpose of the communication;
  
  
• if the dominant purpose is to settle instructions to the lawyer, the communication is covered by legal advice privilege;
  
  
• if the dominant purpose is to obtain commercial views from the non-lawyer addressees, the communication will not attract privilege, even if it is also intended to obtain legal advice from the lawyer;
  
  
• any response from the lawyer that contains legal advice will very likely be privileged even if it is sent to multiple addressees; and
  
  
• multi-addressee communications are considered separate communications between the sender and each recipient.

This final point is the most important consideration to arise from the case. It means that if an email is sent to 10 recipients, one of whom is a lawyer, only the copy of the email that goes to the lawyer will be privileged (assuming it seeks legal advice). The remaining copies of the email will not be privileged even though they contain exactly the same content as the copy sent to the lawyer.

The Court’s application of the approach applied by the English Court of Appeal meant TPI successfully defended the application in its entirety and TEC was not granted access to any of the documents that were the subject of the application.

Practical tips for in-house counsel

The below suggestions may assist in preventing privilege from being waived:

• Avoid using ’Reply all’ where possible.
  
  
• Identify who actually needs access to your advice and consider emailing them individually. This approach may also help prevent lengthy email chains circulating around your organisation.
  
  
• Consider adding an automatic header or footer to your emails requesting that your colleagues do not forward your advice emails to other employees.
  
  
• If you notice certain individuals repeatedly forwarding legal advice, consider asking them directly not to do so by explaining possible consequences.
  
  
• In circumstances where your colleagues are requesting legal advice from you, consider asking them to restrict the purpose of their emails with you to that sole purpose.

Conclusion

It is a common misconception that copying a lawyer on an email is sufficient for a communication to attract privilege. TEC Hedland makes it clear that even an email containing legal advice could result in a waiver of privilege if the dominant purpose is not to obtain legal advice.

In-house counsel must be alert to the dangers posed by long email chains containing multiple purposes and do their best to minimise the risk of waiving their employer’s privilege.