On 12 May 2023, Australian Competition and Consumer Commission (ACCC) quietly updated the ACCC immunity and cooperation policy: frequently asked questions (FAQs). You can read the updated FAQs on the ACCC website here.
Under the ACCC’s immunity policy, clients can seek immunity from cartel proceedings or prosecutions on the condition that they provide “full, frank and truthful” disclosure to the ACCC. In this post we explore the development to the meaning of full, frank and truthful disclosure in the updated FAQs. In particular, the updated FAQs appear to clarify that full, frank and truthful disclosure may mean that certain privileged documents are no longer “immune” from disclosure.
Key takeaways:
- Immunity from a cartel proceeding or prosecution is conditional upon the immunity applicant providing ‘full, frank and truthful disclosure’ and cooperating ‘fully and expeditiously’ with the ACCC throughout their investigation and any ensuing court proceedings.
- The updated FAQs now expressly require immunity applicants to provide all records of factual accounts given by witnesses in respect of the alleged cartel conduct, whether or not they are subject to claims of legal professional privilege. The ACCC has clarified that it will not seek production of other privileged materials, such as legal advice (if the ACCC is satisfied that the privilege is legitimate).
- This development:
- means that clients seeking immunity may be required to waive privilege over, for example, records of interviews with legal representatives; and
- highlights the increased importance for lawyers and clients to ensure separate records are made of factual accounts in respect of the cartel conduct, and legal advice or other correspondence and material subject to a claim of legal professional privilege.
- The ACCC is currently conducting a review of the Immunity Policy and has invited feedback on both the Policy and the FAQ that supplement the Policy, as well as stakeholders’ experience with the immunity program more generally.
Background
The ‘ACCC immunity and cooperation policy for cartel conduct’ (Immunity Policy) applies to persons or corporations seeking immunity from civil proceedings by the ACCC and criminal prosecution by the Commonwealth Director of Public Prosecutions (CDPP) for cartel conduct, as defined by the Competition and Consumer Act 2010 (Cth) (CCA). The Immunity Policy, released in October 2019, is supplemented by the FAQs.
The ACCC may grant civil immunity, or make a recommendation to the CDPP to grant criminal immunity, if it is satisfied that the immunity applicant has met the conditions for immunity set out in the Immunity Policy.
These conditions relevantly include:
- ongoing compliance with the Immunity Policy, including relevantly a requirement to provide “full, frank and truthful disclosure” and cooperate “fully and expeditiously”; and
- ongoing compliance with the cooperation agreement (which may include specific initial requirements for the production of documents and/or requirement for witnesses to be made available as well as additional cooperation requirements).
The ACCC may revoke immunity if it considers that the applicant has not complied with the Immunity Policy or cooperation agreement.
Increasing the price of immunity
The only update to the FAQs relates to the requirement to provide full, frank and truthful disclosure. The new wording is as follows:
Requirements of full, frank and truthful disclosure and full and expeditious cooperation include but are not limited to:
…
b. Providing all records of factual accounts obtained in respect of the alleged cartel conduct, whether or not those accounts may be subject to a claim of legal professional privilege. The applicant, a prospective applicant, or their legal representative(s) should ensure that factual accounts are recorded in a form that is separate from legal advice. Where a document contains a factual account from an individual, as well as legal advice, the document is to be provided but, if practicable, may be redacted to remove references to the legal advice. Other than documents containing a record of factual accounts, the ACCC will not seek the production of material over which a claim for privilege may be made, including legal advice (subject to being satisfied the claim for privilege is legitimate).
This update makes it clear that:
- immunity applicants are required provide all records of factual accounts obtained in respect of alleged cartel conduct, regardless of whether or not those accounts may be subject to a claim of legal professional privilege; and
- where a document contains a factual account and legal advice, redactions may be made to conceal the legal advice – that is, the ACCC will not seek the production of privileged material beyond the factual accounts.
This is the first public statement by the ACCC of an express requirement for immunity applicants to waive any claims for legal professional privilege over factual accounts.
The update is significant because:
- The ACCC and CDPP have previously faced resistance from immunity applicants to provide records of internal investigations on the basis of privilege. For example, in the banking cartel case the CDPP successfully issued subpoenas to JPM (the immunity applicant) following its request (and JPM’s refusal) for notes of interviews and outlines of evidence of prosecution witnesses prepared by JPM’s lawyers in its internal investigation. In that case, the Court found that privilege had been waived by JPM’s conduct in seeking to obtain the benefit of immunity: see judgment here.
- The amendment clarifies the policy about whether certain documents from internal investigations – such as records of interviews with legal representatives – are required to be provided to the ACCC as part of full, frank and truthful disclosure.
This new requirement will apply to any cooperation agreements entered into with the ACCC after 12 May 2023.
What can clients do to protect their privilege claims?
As noted above, aside from documents containing a record of factual accounts, the ACCC does not require applicants to provide material which is otherwise subject to a legitimate claim for privilege, such as legal advice.
If factual accounts or records of interview do include legal advice, those records may be redacted to remove references to legal advice. Where redaction is not practicable, such as where the legal advice is closely related to the factual account, privilege claims may be at risk.
To properly protect legitimate claims for privilege, lawyers and clients should be careful to record factual accounts separately to legal advice. This may include ensuring that internal investigations into facts with respect to the alleged cartel conduct – such as interviews with the immunity applicant or employees of the immunity applicant – are conducted separately to the provision of legal advice.
This post was written by Peta Stevenson, Jacqueline Ibrahim and Zareen Qayyum. This post was also published as a client alert on our website.
Image credit: The Whisper by Brian Smithson (Old Geordie) / Flikr / CC BY 2.0 / Remixed to B&W and Resized
