The what, why and how of legal professional privilege in New Zealand

What Is Legal Professional Privilege?

It allows clients to communicate openly with their legal advisors, confident that what they discuss will remain confidential and protected from disclosure to both other parties and the public, without their consent.

Privilege also ensures that documents and communications made for the purpose of obtaining legal advice, dealing with litigation, and the negotiation of settlement of disputes remain confidential and protected from disclosure in legal proceedings.
Clients must be able to discuss sensitive issues with their legal advisors freely, knowing that their communications will not be disclosed.

Confidentiality v privilege

It is important to understand that confidentiality and privilege are not the same. While information held by lawyers is always confidential, it may not necessarily attract privilege. Privilege is a narrower specific legal protection that applies only to certain communications between lawyers and their clients, meaning clients can refuse to disclose those communications in disputes and legal proceedings .
When claiming privilege, lawyers must be able to establish that proper grounds for the claim exist. Maintaining privilege requires proactive management — ensuring that confidential and privileged documents do not lose their protected status through improper handling or disclosure.

Importance of early engagement

Involving lawyers at an early stage in any dispute is critical to ensuring that communications qualify for privilege. Early engagement allows for proper assessment of what constitutes privileged information and helps structure communications in a way that preserves privilege effectively.
H2: Categories of privilege in New Zealand
Under New Zealand law, there are three main categories of privilege that may apply to documents:

1. Legal Advice Privilege

Covers communications between a client and their legal advisor for the purpose of requesting or obtaining legal services, or for the lawyer to provide such services.

2. Litigation Privilege

Applies to communications or documents made or prepared for the dominant purpose of preparing for a proceeding, or an apprehended (ie, potential) proceeding. This category is broader, as it can extend to communications and documents with other parties outside the lawyer–client relationship.

3. Settlement Privilege

Protects communications made between the parties in connection with an attempt to settle or mediate a dispute.

Key limitations and common misconceptions

Being aware of the limitations and misconceptions around privilege is essential. These include:

• No automatic right to privilege: Simply marking a document as “legally privileged” or corresponding with a lawyer does not automatically make the communication privileged. The content and purpose must satisfy the legal criteria.
• Commercial sensitivity does not equal privilege: Material that is merely confidential or commercially sensitive may not necessarily attract privilege.
• Loss (waiver) of privilege: Privilege can be lost if the privilege holder deliberately discloses a complete copy of a privileged document (express waiver), or if they voluntarily disclose or consent to the disclosure of a significant part of the contents of a privileged communication or document (implied waiver).
• Inadvertent waiver: Privilege may also be lost where a party’s use of privileged material destroys its confidentiality — even unintentionally. Once a communication is no longer confidential, it cannot remain privileged.

Practical tips to maintain privilege

To preserve the privileged status of communications and documents:

• Maintain confidentiality — Privilege depends on confidentiality; once lost, privilege cannot be regained.
• Control communications — Be deliberate about who communicates with legal counsel and who is included on correspondence.
• Restrict circulation — Limit distribution of privileged material both within the company and to external parties. Take extra care with multiple addressees on email chains.
• Be aware of the role of In-house lawyers — Communications with in-house counsel are privileged only if the lawyer is acting in a legal rather than executive or commercial capacity.
• Mark documents appropriately — Label communications “Confidential and Legally Privileged.” While this does not create privilege, it helps identify privileged material in later reviews. However, do so consistently, with restraint and in consultation with your lawyer. The broad or indiscriminate use of privilege labels can undermine credibility.
• Considering the purpose of documents when they are created -. For example, in a likely dispute, drafting preparatory materials as communications seeking legal advice, rather than as stand-alone commentary.
• Organise documentation — Good document management helps prevent inadvertent disclosure and demonstrates a clear intention to maintain privilege.

Maintaining credibility and managing disclosure

By implementing sound practices, clients can demonstrate to the courts and opposing parties that they intend to maintain privilege over information — reducing the risk that the cloak of privilege will be lifted.

In certain circumstances, it may be appropriate, in a dispute, to disclose privileged material intentionally. Lawyers can assist in identifying privileged materials, assessing the potential implications of disclosure and advising on selective or limited waiver strategies.

Even where privilege does not apply, and documents must be disclosed, lawyers can also assist in protecting confidential and commercially sensitive material during any dispute.

If you would like any advice on or assistance with managing privileged and confidential communications, please get in touch with the team at Wynn Williams.