Australia's biggest coal producer, Glencore, has lost a High Court bid to have documents linked to its offshore financial arrangements kept out of reach of the Australian Tax Office (ATO).

Key points: Glencore launched court action to try to force the ATO to return its copies of files from Bermudian law firm Appleby

Glencore launched court action to try to force the ATO to return its copies of files from Bermudian law firm Appleby The files, leaked as part of the Paradise Papers, show how the mining giant moved billions of dollars of assets offshore

The files, leaked as part of the Paradise Papers, show how the mining giant moved billions of dollars of assets offshore The High Court rules legal professional privilege is not a right after the fact, allowing the ATO to examine the documents

The details came to light in the largest data leak in history known as the Paradise Papers, reported by the ABC's Four Corners, which showed the offshore tax arrangements of thousands of the world's wealthiest companies and individuals, including the Queen.

The ATO later obtained the documents as it examined potential tax avoidance uncovered by the data leak.

But lawyers for Swiss-based Glencore argued the documents — revealing how the mining giant moved billions of dollars of global assets into offshore tax structures — were prepared by lawyers in Bermuda and were therefore subject to legal privilege and out of bounds to the ATO's investigation.

While there was no dispute that the material was the subject of legal profession privilege and there was no suggestion of wrongdoing by Glencore, the High Court was effectively asked to decide whether legal privilege could be used to prevent investigators' use of documents already in their possession.

Today the court ruled that legal professional privilege was not a legal right after the fact, but rather was a protection against compelling parties to reveal private lawyer client communications.

It also found there was no justification to widen the application of the privilege in the way Glencore had suggested.

'We can't just ignore the information': ATO

In a unanimous judgement the court remarked on the awkwardness of Glencore's request that the materials be returned, because of the way they were exposed.

"There may be difficulties for the plaintiffs [Glencore] in meeting the requirements for such relief, given that the Glencore documents are in the public domain and there being no allegation concerning the defendants' [ATO's] conduct," the judgement said.

The High Court also advised Glencore that it may have been better able to protect the documents through breach of confidence laws.

But the court said Glencore had not asked it to consider an injunction on those grounds.

Earlier this year ATO Commissioner Chris Jordan said he held feared many companies were misusing legal privilege in order to stymie tax avoidance investigations.

"We want taxpayers to be able to get the right and proper legal advice," Mr Jordan said at a Tax Institute conference in March.

"But when lawyers are claiming privilege on thousands or tens of thousands of documents — and we have seen this — we start to wonder if it's a genuine claim or an effort to conceal a contrived tax arrangement.

"It all comes back to fairness — are you using legal professional privilege because you have a genuine need, or as a way to cheat the system? We'll be taking a tougher stance in the future."

Today ATO Second Commissioner Jeremy Hirschhorn welcomed the High Court judgement, which clears the way for the Tax Office to examine the material.

"Once we have information we can't just ignore it — we are obliged to use all relevant information we have," he said.

"It would be a perverse outcome if the ATO and the courts were not allowed to take into account information that the public at large can access, or had to forget information that is known."