The use of undertakings is common amongst legal practitioners. For example, undertakings are used to facilitate the transfer of files from one practitioner to another or where third-party service providers are engaged on behalf of a client. Undertakings are also used by legal practitioners before the Courts.
It is important that all legal practitioners carefully consider when and how an undertaking is used. A legal practitioner who has accepted an obligation in his capacity as a legal practitioner may have given an undertaking without expressly stating so. Legal practitioners should ensure that undertakings are expressed in clear, precise and unambiguous terms.
A legal practitioner who gives an undertaking on behalf of a client should make it clear that they are not personally liable for the performance of the undertaking. If a legal practitioner proposes to give a personal undertaking, they should only do so if fulfilling the undertaking is within their direct control. A legal practitioner should take particular care before accepting undertakings that lack clarity.
Failure to comply with an undertaking
The failure to comply with an undertaking can lead to an array of consequences. Breach of an undertaking, or failure to fulfil an undertaking to a court, can constitute contempt of court, a breach of contract or amount to unsatisfactory professional conduct or professional misconduct under the Legal Profession Uniform Law (NSW) (Uniform Law).
In New South Wales, Rule 6.1 of the Legal Profession Uniform Law Australian Solicitors Conduct Rules 2015 (Conduct Rules) provides that a solicitor who has given an undertaking in the course of legal practice must honour that undertaking and ensure the timely and effective performance of the undertaking, unless released by the recipient or by a court of competent jurisdiction.
Prohibition to require co-operation of a third party who is not a party to the undertaking
Rule 6.2 of the Conduct Rules provides that a solicitor must not seek from another solicitor, or that solicitor’s employee, associate, or agent, undertakings in respect of a matter that would require the co-operation of a third party who is not party to the undertaking. A breach of an undertaking given by a legal practitioner in the course of his/her practice is regarded by the courts, regulators and the profession as a serious matter. This is because the concept of an undertaking represents the essence of honourable conduct, integrity, professionalism and fitness to practice[1]. Courts take a particularly strong stance against legal practitioners and undertakings.
Implied Undertakings or the Harman Principle
The Harman principle takes its name from the House of Lords’ decision in Harman v Secretary of State for the Home Department [1983] 1 AC 280 where the rule was expressed in terms of an implied undertaking to the Court not to use documents obtained by a court order for a collateral purpose.
The principle is a significant rule of practice that applies in many common law countries, including Australia, England and Canada. A breach of an implied undertaking is capable of constituting contempt of court, as well as being capable of attracting disciplinary sanctions given it may constitute unsatisfactory professional conduct or professional misconduct.
Therefore, it is important for practitioners to have a thorough understanding of this rule. The obligation extends to any person who knows of the original of the documents in court proceedings. A party can seek the court’s leave to use documents, subject to the undertaking, where special circumstances exist.
In the High Court decision of Hearne v Street (2008) 235 CLR 125, the concept of an implied undertaking (or the Harman undertaking) was enunciated. Implied undertakings are further reinforced by Rule 21.7 of the Uniform Civil Procedure Rules 2005 and Rule 20.03 of the Federal Court Rules 2011.
At [96] of Hearne v Street, it was determined that “Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given, unless it is received into evidence.”
An implied undertaking is to the court, rather than to the producing party. As such, a person can only be released from the obligation by the court.[2] Otherwise, a breach is treated as contempt of court.[3]
When a solicitor provides documents to clients, they should ensure clients understand that wider disclosure is not permitted, as this may amount to contempt. Similarly, when receiving information, solicitors should be satisfied they are not being wilfully blind or reckless as to their knowledge or that information’s provenance.
In the recent decision of Re Ramsay Health Care Australia Pty Ltd [2002] VSC 226, the need for parties to be vigilant in managing the risks arising from an implied undertaking were highlighted, both when receiving information produced pursuant to compulsory court processes and when providing such materials to clients. The case clarified that actual knowledge is required to trigger an implied undertaking.
Documents to which an implied undertaking would apply
Hearne v Street set out the type of documents that an implied undertaking applies to, at [96] and extends to ‘copies of documents and information derived from these documents’[4] and even information stored in the mind[5]. Such documents include:
- Documents inspected after discovery;
- Answers to interrogatories;
- Documents produced on subpoena;
- Documents produced for the purposes of taxation of costs;
- Documents produced pursuant to a direction from an arbitrator,
- documents seized pursuant to an Anton Piller order,
- Witness statements served pursuant to a judicial direction; and
- Affidavits
A breach of an implied undertaking will occur when information is used in subsequent proceedings or the document is given to an external third party. The obligation to the court within an implied undertaking captures any use of the documents that would “…promote some private interest … not within the parameters of the action which brought about their disclosure”.[6]
The Victorian Supreme Court’s decision of Re Ramsay Health Care Australia Pty Ltd [2022] VSC 226 confirmed that, in order to be bound by the obligations under a Harman Undertaking, and for there to be a breach of the undertaking, a third party must have actual knowledge that the document in question had, in fact, been produced under a compulsory court process.[7]. However, parties who are wilfully blind or reckless to the fact that a document may have been produced under a compulsory court process may be inferred to have the degree of knowledge required to be bound by the implied undertaking.[8]
Practice management tips to minimise risk
Practitioners receiving information which could be subject to the Harman undertaking should implement procedures to ensure that provenance is clearly understood.
Firstly, to determine whether the Harman Undertaking applies, there are two questions to consider:
- whether the document was produced within the compulsory process of the court; and
- whether the document was read or referred to in open court.
If the answer to the first of these questions is ‘yes’, the implied undertaking will arise (except if it was read or otherwise referred to in open court), noting that there may be some instances where there is uncertainty around whether a document has (or has not) been read or referred to in open court.
Secondly, when receiving documents which relate to, or have formed part of, a court proceeding, there should be strict procedures in place to verify the source of the documents, particularly subpoenaed documents.
Thirdly, if documents originated in prior proceedings, ensure there is clear evidence that a release was obtained or that the documents were tendered or read into evidence in open court before using the documents for any other purpose. The only way to obtain release from the implied undertaking is for an application to be made in the court or tribunal to which an obligation is owed within the relevant proceedings. Granting a release is a matter of judicial discretion requiring consideration of whether special circumstances exist to justify a release. This will depend on the level of privacy and confidentiality necessary to achieve a just outcome for the relevant parties.
Finally, when disclosing documents to clients, practitioners should ensure that they understand the obligations involved in an implied undertaking and that the documents should not be distributed further.
The Re Ramsay Health Care Australia decision is a reminder that the failure to implement the above procedures may amount to a breach of the Harman Undertaking and may constitute contempt of court.
