Privilege claims rejected in Uber class action

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This decision arises in the Uber class action (brought by Mr Andrianakis) on behalf of taxi and hire car industry participants in Victoria, New South Wales, Queensland and Western Australia (Relevant States) alleging conspiracy by unlawful means by several entities in the Uber group (Uber). The case is being heard together with a proceeding brought by Taxi Apps Pty Ltd, owners of the taxi booking app ‘GoCatch’, who also brings similar claims against Uber. Central to the claims is the allegation that Uber entered into an agreement to operate/offer UberX in the Relevant States, using unaccredited vehicles and drivers with the intention of harming the incumbent taxi and hire car industry, who were compliant with the regulations in the Relevant States. Key to this is the allegation that Uber intended and knew that it was an offence to offer point-to-point transport services using unaccredited vehicles and drivers (Ridesharing Offences).

Orders relating to discovery were made in December 2020, following which Uber produced approximately 70,000 documents to the plaintiffs and produced a Privilege Schedule listing a further approximately 12,400 documents over which Uber maintained a claim of legal professional privilege (LPP). The overwhelming majority of those claims were challenged. Given the volume of documents challenged, the parties agreed to a process whereby the Court would be presented with 120 documents over which it was to make a decision, with the findings in respect of the sample set to be applied to the larger set over which the privilege challenges were made. In the end, for a number of reasons, the Court was only required to rule upon 74 sample documents.

Associate Justice Matthews’ decision includes (at [41]-[47]) a useful summary of the general principles relating to LPP.

Whether Uber provided sufficient evidence to establish their privilege claims

In support of its LPP claims, Uber relied on affidavits from an in-house counsel regarding the structure of Uber’s legal department and from Mr Hanson, the partner at Herbert Smith Freehills. No evidence was lead from persons with direct knowledge of the purpose for which the sample documents were created (many have since left Uber). Whilst her Honour did not find that the evidence relied upon by Uber precluded them from claiming privilege (at [73]), she held that the evidence from Mr Hanson involved him “discerning the purpose” by conducting his own review of the sample documents and was “merely his opinions based on the exercise he has undertaken” (at [70]) and it was “imperative” for the Court to inspect the sample documents (at [71]).

There was a dispute between the parties regarding whether it could be said that a document is subject to LPP in the absence of a specific request for advice. It was submitted by Uber (at [82]) that in the context of a solicitor/client relationship, the document was only required to form part of the continuum of communications to keep both sides informed so that advice could be given where needed (citing Balabel v Air India [1988] 1 Ch 317). Her Honour agreed with Uber at a general level, but noted that care needed to be taken when applying this principle to in-house lawyers, stating (at [83]):

There does not need to be a specific request for advice or provision of advice in the individual communication. However, this can only be taken so far. There needs to be some evidence, either on the face of the document itself or from some other source (such as affidavit material or another contemporaneous document that is brought to the Court’s attention), which would allow the Court to conclude that the communication was part of this continuum. This may be able to be more readily inferred where the communications are with external lawyers. In my view, particular care needs to be taken when seeking to apply this proposition to in-house lawyers. In this case, I do not consider it appropriate to infer from the participation of Uber In-House Counsel in communications alone, without more, that those communications were part of the continuum of communications keeping the lawyer and the non-lawyer informed so that advice could be given as needed.

Her Honour’s decision also contains a detailed discussion of the submissions of the parties relating to LPP in the context of in-house legal counsel (at [98]-[136]). Her Honour’s analysis of the issue can be found at [137]-[144] of the judgment. Her Honour’s comments at [141] are particularly salient:

In the end, it all comes down to a consideration of the particular organisation, the individual in-house lawyers, the context, and the specific communications or documents. Even if the in-house lawyer has a purely legal role and displays the indicia of independence, the context and documents themselves may be reviewed so as to ascertain whether the dominant purpose was a privileged one.

LPP and proceedings involving third parties

In its reply submissions, Uber sought to claim LPP over certain sample documents relating to prosecutions against UberX drivers. The plaintiffs opposed this, arguing that the litigation limb of LPP did not allow Uber, who were not a party or likely party to the prosecutions against UberX drivers, to claim LPP in relation to those proceedings. Her Honour agreed with the plaintiffs, and was influenced by the lack of evidence from Uber in support of its submissions.

Waiver

The plaintiffs argued that Uber had waived privilege over certain sample documents because non-lawyer Uber employees or other persons were involved in certain communications. Her Honour’s decision sets out the general principles relating to waiver at [164]-[172]. Her Honour generally found that no waiver had occurred.

Misconduct exception

A significant proportion of her Honour’s reasons relate to the plaintiffs’ argument that the misconduct exception (as found in s 125 of the Evidence Act 2008 (Vic)) prevented Uber from making claims for LPP. The misconduct exception arises in circumstances where communications are made or documents are prepared by a client or lawyer, inter alia, in furtherance of the commission of an offence. Exceptions also apply for fraud or acts giving rise to civil penalties, although neither were in issue in this instance.

It was “common ground” that the Ridesharing Offences were a fact in issue in the proceeding for the purposes of s 125(2) of the Evidence Act. The key issues in dispute were therefore: (i) whether an offence was committed, and (ii) the meaning of the phrase “in furtherance of”. The parties each made detailed submissions regarding the general principles relating to the misconduct exception (see [176]-[209]). Her Honour noted that there was consensus between the parties as to the principles, with a divergence of views as to their application in the circumstances of the proceeding. At [211] her Honour adopted the summary of principles set out by Elliott J in Talacko v Talacko [2014] VSC 328. These include, inter alia:

• The standard of proof – The Court only need be satisfied that there are “reasonable grounds” that the offence, fraud or penalty act was committed. It does not need to be satisfied on the balance of probabilities. However, the party challenging privilege must do more than simply allege that a fraud/offence has occurred: there must be something to “give colour to the charge” with a factual basis.
• Knowing involvement - The client needs to be knowingly involved in the commission of the offence. This includes where the offence was committed by a person other than the client.
• The meaning of “in furtherance of” – Means “the fact of being helped forward; the action of helping forward; advancement, aid, assistance”.
• Subsequent conduct – Conduct subsequent to the commission of the offence may or may not be in furtherance of an offence, depending on the nature and purpose of the conduct.
• Advice for other persons – Legal advice sought by the client with the purpose of assisting another person to commit an offence is subject to the misconduct exception.
• Concealment – Legal advice sought about what steps could be taken to allow the fraud/offence to continue, including how to conceal the fraud, is subject to the misconduct exception.

Extensive submissions were made by the parties regarding the application of the facts to the principles relating to the misconduct exception (see [215]-[267]). In particular, Andrianakis led evidence (at [227]-[247]) to submit that Uber:

• knew using unlicensed UberX partners was unlawful;
• was aware many of the UberX partners were unlicensed;
• sought to build scale by the systematic commission of Ridesharing Offences on a mass scale to ‘flip’ a city, whereby regulators had no choice but to legalise UberX; and
• developed mechanisms to avoid enforcement from regulators and schemes for the payment of fines issued to UberX partners.

Her Honour’s analysis and ruling with respect to the misconduct exception commences at [268]. Her Honour held that the Ridesharing Offences were clearly identified and defined by the plaintiffs, so as to give “colour to the charge”. Her Honour rejected Uber’s submission that it was necessary for the plaintiffs to identify each individual commission of the Ridesharing Offences. Her Honour noted:

[273] The commission of offences, being the Ridesharing Offences, was not a theoretical possibility. It was, by virtue of the manner in which UberX was launched and operated in the Relevant States, a certainty. I accept the Plaintiffs’ submission that Ridesharing Offences were being committed systemically and on a large scale.

[274] Even were that not the case, there is ample evidence before the Court that Ridesharing Offences were in fact committed…

Her Honour also held that relevant communications were made and documents created in furtherance of the Ridesharing Offences. Her Honour’s reasons at [277] are particularly instructive (footnotes omitted):

I accept the Plaintiffs’ submission that, prior to legalisation of ridesharing in the Relevant States, a clear consequence of the launch and operation of UberX in those states was that Ridesharing Offences were committed systemically and on a large scale. I accept that the commission of Ridesharing Offences was an integral aspect of the UberX business model in respect of the Relevant States. I also accept the Plaintiffs’ submission that the Defendants’ purpose in seeking legal advice was to advance the operation of UberX in those circumstances. What is required is that the communication or document must be in “furtherance” of the commission of the offences, being “the fact of being helped forward; the action of helping forward; advancement, aid, assistance”. In this sense, what is important is whether the advice has ‘helped forward’ the commission of the offence. It is the client’s purpose, not the lawyer’s (if the author of the document is a lawyer), determined objectively, which is relevant, and there is nothing in the text of s 125 of the Evidence Act or in the numerous authorities referred to by the parties which suggest that this must be the sole or dominant purpose.

Her Honour was however cautious to note that not all legal advice sought in relation to UberX fell within the misconduct exception, noting (at [280]) that it was:

… legal advice after the Relevant Dates … regarding aspects of the operation of UberX such as launching and continuing to provide UberX using unlicensed drivers, avoiding enforcement activity or detection, and dealing with fines and prosecutions and UberX Partners about those, including supporting UberX Partners, which falls within the Misconduct Exception.

Of the sample documents considered by her Honour, 48 had their privilege claims rejected. It is expected that Uber will appeal the decision.

Andrianakis v Uber Technologies Inc; Taxi Apps Pty Ltd v Uber Technologies Inc [2022] VSC 196

Supreme Court of Victoria, Matthews AsJ,
26 April 2022

Andrianakis’ Solicitors: Maurice Blackburn
Taxi Apps’ Solicitors: Corrs Chambers Westgarth
Defendants’ Solicitors: Herbert Smith Freehills
Andrianakis’ Funder: Harbour Litigation Funding

Austlii Link: Available here

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