Australian Securities and Investments Commission v Insurance Australia Limited

Australian Securities and Investments Commission v Insurance Australia Limited [2026] FCA 107 is a Federal Court decision about legal professional privilege in the middle of an ASIC enforcement proceeding. ASIC sought a declaration that a report called the Technical Paper was not privileged, so it could be used at trial. The respondents said the report was a confidential communication prepared for the dominant purpose of obtaining legal advice.

Rofe J dismissed ASIC's application. The court held that the respondents had discharged their onus of proving privilege over the Technical Paper. The court also refused to inspect a wider set of other privileged contextual documents that the respondents wanted to rely on without tendering them. That procedural ruling is a major part of the case because it shows the limits of how a privilege claim can be proved while still preserving fairness to the challenger.

The published reasons also make clear that the court inspected the Technical Paper itself. However, the published text available for this page is truncated before the full later reasoning. That means the result and the governing principles are clear, but the complete judgment should still be checked for the full factual detail and the court's complete explanation of why the Technical Paper satisfied the dominant purpose test.

The dispute arose in broader ASIC proceedings against Insurance Australia Limited and Insurance Manufacturers of Australia Pty Limited, both subsidiaries within the IAG group. ASIC was investigating alleged false or misleading representations in advertising and promotional material about the application of discounts to insurance pricing.

The judgment records that ASIC's investigation concerned possible contraventions of the Corporations Act and the ASIC Act, and that ASIC had issued notices under s 30 of the ASIC Act requiring production of books and information.

One set of notices issued on 24 May 2022 required reports recording the outcome of reviews or investigations about the extent to which demand adjustment factors, renewal optimiser, and a customer's or group of customers' capacity or propensity to pay affected premiums, including any consideration of the impact on promoted loyalty discounts. The Technical Paper was identified as responsive to those notices.

IAG did not simply hand over the Technical Paper as an ordinary business document. It listed the document on a privilege schedule sent to ASIC on 17 June 2022 and later provided additional particulars in an amended privilege schedule. The document was then disclosed to ASIC under a Voluntary Confidential Legal Professional Privilege Disclosure Agreement dated 3 August 2022.

That arrangement allowed ASIC to inspect the document while preserving the privilege dispute and setting a process for either party to seek a court declaration if ASIC did not accept the privilege claim.

The factual background described in the published reasons starts in mid-May 2019. Mr Kimberley, an in-house lawyer at IAG, and another employee attended a meeting with Deloitte, which was then assisting IAG with a remediation project for customers of HBF Health Insurance. Deloitte identified potential issues concerning the application of discounts for HBF customers.

A follow-up email on 15 May 2019 circulated Deloitte's observations and suggested the remediation might need to extend beyond the previously identified cohort and potentially to all discounts, with possible ASIC guidance if needed.

Mr Kimberley then discussed the matter with senior legal personnel inside IAG. The judgment records his evidence that, at that stage, he did not know whether the identified issues actually existed within IAG's pricing processes. It was agreed that further work was required to understand whether the issues were real and, if so, precisely what they were. The legal team then attended regular meetings with pricing and compliance teams while facts were gathered.

That background mattered because privilege turns on purpose. If a report is created mainly for commercial, operational or compliance reasons, privilege may fail. If it is created mainly so lawyers can advise on legal risk, privilege may attach.

The central issue was whether the Technical Paper was a confidential communication prepared for the dominant purpose of the respondents obtaining legal advice. That is the common law test for legal professional privilege applied by the court. The respondents, as the parties claiming privilege, carried the onus of proving that the test was met.

The judgment sets out the governing principles in a practical way. Purpose is a question of fact determined objectively by reference to the evidence, the nature of the document and the surrounding circumstances. The relevant purpose may be that of the author or of the person under whose direction the document was brought into existence, depending on the circumstances. In some cases the document itself reveals its purpose.

In others, the court must look closely at the context in which the communication occurred and the topics to which the legal advice was directed.

The court also stressed the quality of evidence required. Dominant purpose is not established by bare assertion. Focused and specific evidence is required in respect of each communication, rather than generalised statements or repeated formulae. That point matters for businesses because privilege disputes are often won or lost on the evidentiary record rather than on broad legal propositions.

A second issue concerned timing. The judgment says the relevant time for assessing purpose will depend on the circumstances, but where a party commissions a report from a third-party provider, the relevant time will usually be the time of commissioning. Later events can still matter, especially if the purpose of the report changed between commissioning and delivery.

There was also a separate procedural issue about fairness. The respondents wanted the court to inspect other privileged materials, including emails, contemporaneous documents and confidential annexures recording recollections of privileged conversations, to help explain why the Technical Paper was privileged. They did not want to tender those materials to ASIC, but still wanted to rely on them. ASIC objected, arguing that if the respondents relied on those materials, ASIC had to be able to review and test them.

So the court had to decide not only whether the Technical Paper itself was privileged, but also whether its inspection power extended beyond the subject document to a wider body of contextual privileged material.

Rofe J dismissed ASIC's interlocutory application. The formal orders made on 18 February 2026 recorded that ASIC's application dated 30 September 2025, seeking a declaration that the report dated 14 June 2020 with document ID IAG.0003.0180.0194 was not protected by legal professional privilege, be dismissed. The court also ordered that the costs of the application be costs in the cause.

In practical terms, ASIC did not obtain the declaration it wanted and the privilege claim over the Technical Paper succeeded at this interlocutory stage.

Before reaching that conclusion, the court dealt with the inspection issue. It accepted that a court has power to inspect the document that is itself the subject of a privilege dispute. But it refused to inspect the broader set of privileged contextual materials that the respondents wanted to hand up without tendering. The judge considered that course unfair because ASIC would have no ability to review the material, test it, respond to it or make submissions about it.

The court also referred to practical difficulties identified in earlier authority, including the difficulty of giving reasons without disclosing privileged material, the burden on the court, and the need to regulate procedure consistently with the just and efficient determination of proceedings.

The court said that the present scope of the inspection power, allowing inspection of the subject document but not privileged contextual documents more broadly, strikes the appropriate balance between the interests of the party claiming privilege and the interests of the party challenging the claim. The absence of express authority supporting the broader inspection power also supported that conclusion.

That part of the judgment is important in its own right because it limits how a party can try to prove privilege while still withholding supporting contextual material from the challenger.

On the substantive privilege question, the judgment states that, having regard to the evidence and submissions and after inspecting the Technical Paper, the court considered that the respondents had satisfied their onus and established that the Technical Paper was protected by legal professional privilege. The court had earlier identified the key question as whether the respondents had proved that the Technical Paper was a confidential communication prepared for the dominant purpose of obtaining legal advice.

The court's answer was yes.

That said, the published reasons available for this page are truncated before the full later reasoning is reproduced. So while the outcome, the orders, the inspection ruling and the governing principles are clear, the complete judgment should still be checked for the full explanation of how the evidence about commissioning, purpose, confidentiality and surrounding circumstances led the court to uphold privilege over the Technical Paper.

Businesses should read the case as strong authority on the need for specific evidence and procedural fairness, while recognising that the complete judgment remains important for the full detail of the court's dominant purpose analysis.

This case is especially useful because it shows how courts look at both documents and conduct when deciding privilege. The Technical Paper itself mattered, and the court inspected it. But the surrounding conduct also mattered: who was involved, what concerns had arisen, what work was being done, what the legal team needed, and how the report was described and handled.

The judgment records that the Technical Paper was attached to an email dated 14 June 2020 sent to seven direct recipients and copied to five recipients. The respondents argued that the document was a confidential communication from client to internal lawyers made for the dominant purpose of seeking legal advice. ASIC challenged that characterisation. The court was satisfied that the Technical Paper was a communication for the purposes of the application.

The evidence came from several sources, including in-house legal personnel, the report author from Finity, external lawyers and business witnesses. That reflects a practical reality in privilege disputes involving third-party reports: the court often needs evidence from the lawyer who sought the work, the person who prepared it, and the business personnel who were involved in the process. The judgment also notes that Mr Lin, the report author, was cross-examined.

That is another reminder that privilege claims can be tested closely and should be supported by witnesses who can explain the report's purpose in concrete terms.

The failed attempt to rely on hidden contextual material is also important. The respondents initially referred to a larger body of privileged material and later narrowed the set of documents they wanted the court to inspect. Those materials included emails, contemporaneous documents and confidential annexures describing recollections of privileged conversations and the purposes of work performed. The court refused to inspect them because the respondents wanted to rely on them without tendering them.

In practical terms, that means a business should not assume it can preserve privilege over every surrounding document while still using those documents as unseen support for the main privilege claim.

Even though this case arose in a large insurance and ASIC context, the privilege lessons apply much more broadly. Many businesses commission reports after a complaint, regulator query, cyber incident, pricing concern, workplace issue or possible breach. Those reports may be prepared by accountants, consultants, investigators, actuaries, HR specialists or technical experts rather than lawyers.

This case shows that using a third party does not automatically destroy privilege, but it also does not automatically create it.

The key question is why the report was created. If the real purpose is to help management make commercial decisions, fix operations, satisfy ordinary governance processes or prepare public messaging, privilege may be difficult to establish. If the report is commissioned confidentially so lawyers can advise on legal exposure, regulatory obligations or litigation risk, privilege may be available. Courts will look at the evidence objectively, not just at how the document is labelled.

The decision also highlights procedural fairness. Businesses sometimes hope a court will privately inspect a wider body of privileged material to understand the context and uphold the claim. This judgment shows there are limits. If the other side cannot see and test the material, the court may refuse to inspect it. So the privilege case should be built with admissible, specific evidence from the right witnesses from the outset, rather than on the assumption that hidden contextual material will fill the gaps.

For business owners and in-house teams, the practical reading is straightforward. Think about privilege before the report is commissioned, not after the regulator asks for it. Involve lawyers early. Make sure the engagement records the legal purpose clearly. Limit circulation to those who need to know. Keep separate streams for legal-advice work and ordinary remediation or operational work where possible.

None of that guarantees privilege, because courts look at substance over form, but it puts the business in a much stronger position if the claim is later challenged.

Because the published reasons available for this page are truncated before the full later analysis, businesses should also be careful not to overread the case. The decision clearly supports the need for strong evidence and fair procedure, and it clearly records that privilege was upheld over the Technical Paper. But anyone relying on the case for detailed legal argument about a similar report should still review the complete judgment and the underlying evidence in full.

The judgment was delivered by Rofe J on 18 February 2026 in the Federal Court of Australia. The interlocutory application had been filed on 30 September 2025. The hearing took place on 27 November 2025 and resumed on 4 February 2026 after further submissions on the inspection issue. The orders dismissed ASIC's application and made the costs of the application costs in the cause.

The published reasons available for this page clearly identify the orders, the issues, the governing principles and part of the factual background. They also clearly state that the respondents satisfied their onus and that the Technical Paper was protected by legal professional privilege. However, the published text available here is truncated before the full later reasoning.

Anyone relying on the case for detailed legal analysis should read the complete judgment for the full factual narrative and the court's complete reasoning.