Albanese government advances legal privilege probe after PwC scandal
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The news: The Albanese government is progressing its review into tactics used by PwC to frustrate investigations into its conduct, with the Attorney General and Treasurer on Monday releasing a discussion paper on legal professional privilege (LPP) in Commonwealth investigations.
The government is calling for regulators, enforcement agencies and legal professionals to consult on how to preserve legal privilege while mitigating the ability of "bad actors" to use such privileges to obstruct investigations into misconduct.
Context: The review came in the wake of PwC' Australia's tax scandal, in which the accounting firm was found to be helping clients like Google to skirt around tax avoidance laws it had helped the government develop throughout 2015.
Amid a parliamentary probe, Australian Tax Office chairman Chris Jordan said the ATO became aware of multiple companies "suspiciously" restructuring their affairs to minimise tax payments. Attempts at investigating PwC's role in those changes, however, were stymied by the firm blocking access to documents on the basis of legal professional privilege between its clients and itself.
Attorney General Jim Chalmers and Treasurer Mark Dreyfus are leading the review into companies using legal privilege to frustrate such investigations as the ATO tried to perform into PwC.
What they said: The discussion paper put out by the Attorney-General and Treasurer notes that legal privilege is essential to preserve, but that it hopes to do so while cracking down on attempts to misuse it.
"There can be many reasons why a particular LPP process is time consuming or complex – this does not necessarily mean that the LPP claim is improper," the discussion paper reads. "However... there is concern that bad actors may seek to take advantage of current LPP processes that can be complex, lengthy and costly to intentionally obstruct or frustrate Commonwealth investigations."
The source: Treasury
