How ‘advice’ and ‘independence’ influence claims for privilege by in-house counsel
By Chern Tan and Catherine Hamilton-Jewell
The Federal Court in Archer Capital 4A as trustee for the Archer Capital Trust 4A v Sage Group plc (No 2)  FCA 1098 recently considered the concepts of ‘legal advice’ and ‘independence’ in relation to claims for legal professional privilege.
The decision is good news, suggesting a move away from ‘independence’ being a separate requirement for in-house counsel. Rather, the preference expressed in this judgment is that any requirement of independence is an aspect of the professional relationship between lawyer and client. The preferred view (although it was unnecessary to decide in this case) is that provided in-house counsel are acting in a professional capacity in relation to a professional matter and the confidential communications came into existence for the dominant purpose of legal advice, then legal professional privilege will attach to the communications, without the need to separately prove independence.
The decision also confirms that ‘legal advice’ can be more than a purely black letter interpretation of the law and extends to what a prudent and sensible person should do in the relevant legal context…
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Despite their prevalence, there has been some uncertainty in relation to the income tax treatment of earnout arrangements.