What happened: A court ruled an insurer must hand over confidential fraud tip-off communications because claims handling is not a “profession” attracting evidentiary privilege.
Who’s involved: MLC Limited (now Acenda), an insurer, and a claimant under a group superannuation TPD scheme.
What’s at stake: A $400,000 total and permanent disablement benefit and whether insurers can shield tipster identities in fraud investigations.
Why it matters: Claims teams that promise confidentiality to fraud tipsters may not be able to keep that promise once litigation begins.
Where it stands: Ruled - MLC must produce the documents unredacted. The underlying TPD dispute remains unresolved.
Someone tipped off an insurer about a disability claimant - said he was fixing cars for cash in his front yard, riding go-karts, climbing trees, and selling his prescription medication. The insurer promised to keep the tipster’s name secret.
A court has now ordered it to break that promise.
The Supreme Court of New South Wales ruled on November 3 that MLC Limited, now known as Acenda, cannot use professional confidential relationship privilege to withhold anonymous tip-off communications from the very claimant they relate to. The privilege, set out in sections 126A and 126B of the Evidence Act 1995 (NSW), protects communications made in confidence to someone acting in a “professional capacity.” The court found that description does not fit an insurer handling claims.
The reason, in the court’s words: insurance is a business, not a profession.
The claimant held total and permanent disablement cover under a group superannuation scheme. In February 2023, he lodged a claim for a $400,000 TPD benefit. MLC assessed it, accepted it on the information before it, and in August 2023 paid the benefit to the superannuation trustee.
Then the tip-offs arrived. Between September and October 2023, a confidential source contacted MLC alleging the claimant had been working while supposedly disabled. The source asked that their identity be kept confidential. MLC reopened its assessment and asked the superannuation trustee to hold the payment. It then launched its own investigation, including surveillance and witness statements.
The claimant sued to recover the benefit in November 2023. MLC cross-filed in April 2024, asking the court to declare it did not have to pay.
The dispute that reached the court was not about the fraud allegations themselves. It was about documents. The claimant issued a formal demand for MLC’s claims file covering the period around the tip-offs. MLC produced the file but blacked out the tipster’s communications, arguing they were shielded by professional confidential relationship privilege.
To succeed, MLC needed to show two things: that a qualifying “relationship” existed between the tipster and MLC, and that MLC received the communications while acting in a “professional capacity.”
It failed on both.
On the relationship question, the court found there was nothing between MLC and the tipster that amounted to a relationship at all. What happened was “the unsolicited and gratuitous provision of some alleged information with two follow-up communications.” Not enough.
On the profession question, the court drew on a test articulated by a former Chief Justice of Australia. The test identifies “selflessness” an ethical commitment to temper commercial self-interest in service of the community as the line between a profession and an occupation. Claims handling, carried on “as far as lawfully possible in MLC’s own commercial interests,” did not clear that bar.
The court put it plainly: “for an occupation to describe itself as ‘professional’ does not make it a profession for the purposes of the Act.”
MLC had pointed to its lead case consultant’s qualifications, including a Certificate IV in Life Insurance. The court accepted the qualifications but found they did not change the character of the work. It also noted the consultant had only brief initial involvement before the matter was handed to a more junior colleague whose qualifications were not in evidence.
MLC must now produce the unredacted communications and with them, the information that could identify the source. Separate claims for legal professional privilege over other documents were resolved in MLC’s favour.
The underlying question - whether the claimant is entitled to the $400,000 benefit - remains open. The parties had a mediation scheduled for later the same week the ruling was handed down.
For claims and special investigations teams that routinely receive confidential tip-offs, the decision is a sharp reminder that a promise of confidentiality to a source may not survive a document production order - and that professional privilege is unlikely to be the shield that protects it.
