What legal privilege means
The Bermuda Government has stated that the Auditor General has no right to inspect certain documents held by Government officials relating to a defamation lawsuit launched by the former Premier and the present Deputy Premier.
Normally, this would be quite straightforward. The Audit Act 1990 gives the Auditor General the right to receive all information she reasonably requires to investigate monies spent by Government. And since the Government paid the legal fees for the defamation lawsuit, the Auditor General would have the right to investigate the facts surrounding such payment to determine whether such payment was improper.
But this matter has been complicated by the Deputy Premier's claim that the Government was a party to the lawsuit, the requested information is legally privileged, such privilege overrides the Audit Act and, therefore, the Auditor General has no right to inspect the documents.
To determine whether this assertion is legally supportable, we need to first understand the legal privilege rule and then apply that rule to the facts.
What is legal privilege?
Legal privilege (also known as solicitor/client privilege) is a rule of law that protects all communication between a lawyer and his client from being disclosed to a third party without permission of the client. The rule states that the privilege belongs to the client and can be waived only by the client. In other words, the lawyer cannot disclose the information to a third party without the consent of the client, but the client is free to disclose the information to anyone he so chooses.
The purpose behind the rule is to protect the integrity of the judicial system. Since most people are not lawyers and are not fully versed in the intricacies of the law, they must rely on lawyers to have full access to our judicial system. By protecting communications between lawyers and their clients, the state provides individuals with the ability to make full disclosure to their lawyers and receive proper legal advice without fear of the disclosed information being used against them in the future. Simply put, without solicitor/client privilege, the judicial system would be of little use to most citizens and would eventually collapse.
Who is the client and who is the lawyer?
There are two lawyers in this fact situation: the Canadian lawyer who launched the defamation lawsuit and the Attorney General. There are also three potential clients: the former Premier, the Deputy Premier and the Bermuda Government.
Clearly the former Premier and the present Deputy Premier are clients of the Canadian lawyer. The defamation lawsuit was launched in their names, so they are the clients of the Canadian lawyer who is acting on their behalf. They cannot be, in their individual capacity, the clients of the Attorney General because the AG can only act on behalf of the Government.
In response to allegations that Government Ministers would have been illegally misappropriating public funds if they authorised Government payment for a lawsuit by private individuals, the Deputy Premier stated that the Government was also a client of the Canadian lawyer and therefore such payments were not illegal and the information requested by the Auditor General from various Government Ministers (including the Attorney General) was privileged.
So let's look at the legal privilege rule to see whether the refusal to provide the requested information was legally justified.
Applying the legal privilege rule to the facts
As far as the application of the legal privilege rule goes, it is irrelevant whether the Bermuda Government is or is not a client of the Canadian lawyer. Only lawyers are restricted under the legal privilege rule from disclosing information. Clients are free to disclose to whomever they want.
So if the Government is a client of the Canadian lawyer, it has the right to disclose the privileged information to anyone it so chooses, including the Auditor General and the Bermuda public. And if the Government is not a client, it is simply a third party that is also free to make such disclosure.
So if the Government wanted to let the Auditor General and the Bermuda public know what was going on, it clearly could do so.
But what if the Government didn't want the Auditor General or the public to know what was going on? Could it legally withhold the information? The answer is that it may withhold the information from the public, but may not withhold the information from the Auditor General. Here's why.
Disclosure to the Public
Since there is nothing in the Constitution or the laws passed by Parliament that requires the Government to disclose privileged information to the public, the Government is free to withhold the information from the public. Such withholding may not be in accordance with full transparency or good governance, but it is not illegal.
Disclosure to the Auditor General
Unlike the situation with the public, there is a specific law - the Audit Act 1990 - requiring disclosure to the Auditor General. Section 14 of the Audit Act states:
The Auditor [General] is entitled in the exercise and for the purpose of his functions
(a) to request that he be supplied with any explanation, information or assistance which he may reasonably require for the performance of his functions and
(b) to require access to all … records relating to [the accounts of Government], and any person to whom a reasonable demand by the Auditor [General] … is properly directed shall comply with the demand with all reasonable dispatch.
Section 20 of the Act states that
A person who … fails or refuses to fulfill his duty under section 14 in relation to a demand properly directed to him under that section commits an offence against this Act for which he may be prosecuted summarily; and, if convicted of such offence, he is liable to a fine not exceeding $5,000 or to imprisonment for a period not exceeding twelve months or to both.
So Government Ministers would be legally required to disclose the requested information and documents to the Auditor General provided that the Auditor General reasonably required that information and those documents for the performance of her duties.
Had the Deputy Premier not claimed that the Government was a party to the Canadian lawsuit launched by the former Premier and the Deputy Premier, there would be no need (and probably no right) for the Auditor General to review the documents dealing with the lawsuit. She would have simply concluded, without the need of any further evidence, that the Government's payment of fees to the Canadian lawyer was improper and unlawful.
But since the Deputy Premier is claiming that the Government was also a party to the lawsuit, the Auditor General must review the relevant documents, including the lawyer's remit, to ensure that the Government's lawsuit was not frivolous and that the fees and other costs were apportioned correctly. So her request for documents would clearly be reasonable and therefore failure by a Minister to comply with that request would be a breach of the law exposing them to potential fine and imprisonment.
This is not the end of the story. There may be one Government Official that might not have to comply - the Attorney General. He could argue that he is the lawyer for the Government and any communication between him and his client is privileged and therefore does not have to be disclosed.
The problem with such an argument is that legal privilege deals with disclosure to a third party. So this begs the question: Does disclosure to the Auditor General constitute disclosure to a third party?
At first glance you might think that it is not disclosure to a third party because the Auditor General is a Government officer and therefore part of the Government. But it's not as simple as that. While the Government is a separate legal entity, making disclosure to the mail carrier or the trash collector (both of whom are part of the Government) is not the same as making disclosure to the Premier or another Cabinet Minister.
So where do we draw the line and on what side of the line does the Auditor General stand?
Governments, corporations and other non-human legal entities have a “mind and management” part and an “arms and legs” part. Proper disclosure by a lawyer can be made only to the “mind and management” part. In the case of a corporation, that “mind and management” would be the Board of Directors and senior officers such as the CEO, the President and certain vice presidents who have responsibility for the subject matter of the litigation. In the case of Government, that “mind and management” would be the Cabinet and those senior civil servants (such as the Permanent Secretary) who have responsibility for the subject matter of the litigation.
Since the Auditor General is not part of Government's “mind and management”, the Attorney General would not be able to disclose the information to her unless the “mind and management” of Government told him it was OK to do so. In other words, unless the present Premier tells the Attorney General it is OK to make disclosure to the Auditor General, the Attorney General is prohibited from doing so, even though the Audit Act says he must make such disclosure or be subject to fine and possible imprisonment.
But wouldn't such an analysis leave us in the ridiculous position that Government officials could forever hide information from the Auditor General merely by first making disclosure to the Attorney General and then claiming the information was privileged? The answer is no.
While the Attorney General, as the Government's lawyer, is prohibited from making disclosure without first being directed by his client (the Government) to do so, the Premier and all other Minsters have no such legal shelter to hide from their disclosure obligations under the Audit Act. These persons are not the client (the Government is) and they are not the lawyer acting on the behalf of the client (the Attorney General is). So when the Auditor General makes a demand upon them to disclose to her all information within their possession or capable of being in their possession, they must make such disclosure to her. Not only must they give the Auditor General all documents in their possession, but they must also order the Attorney General to provide her with the documents in his possession. Failure to do so is a violation of the Audit Act, which carries the sanction of fine and imprisonment.
But wouldn't that mean that Government legal matters would, effectively, no longer have confidentiality, and therefore the whole purpose of the legal privilege rule would be undermined?
The answer is, again, no. Just because Government Ministers must disclose the requested information to the Auditor General doesn't mean the information will be made public. The Auditor General and her staff deal with confidential information every day and are required to keep that information confidential in accordance with the requirements set out in the Audit Act.
The legal privilege rule can be a tricky area of the law, but as long as you keep clear who the client is and who the lawyer is, the application of the rule brings about a logical and fair result.
In this case, the Attorney General is prohibited by the legal privilege rule from disclosing the requested documents to the Auditor General until ordered to do so by the Premier. The Premier and her Cabinet Members are required under the Audit Act to provide the Auditor General with the documents she has requested, and that requirement would include all documents that are within their power to obtain, including the documents held by the Attorney General.
So the Premier is under a legal obligation to order the Attorney General to disclose the documents to the Auditor General, and the Attorney General must then disclose the documents as so ordered.
Finally, the Auditor General must keep the information confidential to the extent required under the Audit Act.
Kevin Comeau, a Canadian lawyer, has resided in Bermuda since 1989. For the last seven years Mr Comeau has spent much of his effort toward the development of social policy proposals with special emphasis on decreasing the gap between the haves and have-nots in Bermuda. Mr Comeau recently established the Good Governance Institute of Bermuda, which sets out a number of these social policy proposals. (For more information see www.bdagoodgov.org)
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