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Education briefings - New developments in privilege in employment

  • United Kingdom
  • Education - Briefings

25-10-2019

Two recent decisions have provided additional guidance in the area of privilege in an employment context. The cases provide information that will be helpful to lawyers advising in this area and to those seeking and utilising legal advice, including HR professionals at education institutions.

Background – legal advice privilege

Privilege allows a party to withhold the production of documents and evidence to third parties and the courts. There are various categories of privilege. The most common category is legal professional privilege, which includes legal advice privilege and litigation privilege.

Each case depends on its own facts as to whether privilege applies in the circumstances. The courts have developed a number of principles in this respect. In the case of legal advice, confidential communications between a lawyer and a client which have come into existence for the purpose of giving or receiving legal advice will generally be privileged. However, legal professional privilege will not apply where there is iniquity which would be contrary to public policy to protect from disclosure.

Privilege can be inadvertently lost or waived and when that happens it cannot be reclaimed. Further, where a party elects to waive privilege in some communications, it will also be obliged to disclose other communications that form part of the same "transaction" and which would otherwise be covered by privilege. It is therefore very important to take care to maintain privilege where it arises.

Two recent cases have demonstrated some of the principles that are applied by the courts in considering privilege, including waiver of privilege.

Shell International Limited v Curless (previously X v Y)

The Court of Appeal has handed down a significant decision on whether legal advice privilege should be disapplied in relation to advice which is allegedly iniquitous (i.e. deliberately dishonest). This was a novel point as the principles of iniquity have only been applied in the past where a crime or serious fraud has occurred.

A law firm provided legal advice by email to Shell regarding a redundancy exercise, particularly in relation to the application of that exercise to Mr Curless who had previously made allegations of disability discrimination against the company. That email advice was later disclosed to Mr Curless by an anonymous source and he sought to rely upon it in the context of subsequent employment tribunal proceedings to allege his redundancy was a sham. Shell claimed legal professional privilege in respect of the email. However, the Employment Appeal Tribunal found the email recorded advice on how to cloak as redundancy the dismissal of Mr Curless for making complaints of disability discrimination and for asking for reasonable adjustments. Consequently, it was determined that the advice could not attract privilege as it was intended to facilitate an iniquity, namely to disguise unlawful discrimination and victimisation.

On appeal, the Court of Appeal rejected the Employment Appeal Tribunal’s conclusions, holding that the advice given reflected conventional advice on how Mr Curless might be either offered voluntary severance or dismissed on the grounds of redundancy in the course of Shell’s reorganisation and the risks associated with the available routes. The Court of Appeal found that this was not advice to act in an underhand or iniquitous way and that the iniquity exception therefore had no application.

Kasongo v Humanscale

The Employment Appeal Tribunal has also recently determined a case relating to privilege, this time in relation to waiver of privilege.

Ms Kasongo alleged that Humanscale UK Ltd dismissed her shortly after she had informed Humanscale that she was or might be pregnant. Humanscale denied knowing that Ms Kasongo was pregnant, maintaining that her dismissal was due to matters including her poor performance and attendance.

Ms Kasongo brought a claim in the Employment Tribunal arising out of her dismissal. As part of the discovery exercise, Humanscale disclosed documents it considered supported its defence of the claim, namely, a note made by a senior HR manager, summarising the advice given by the company's external solicitor regarding the dismissal process on a date prior to the notification of pregnancy; an email from the senior HR manager on the same day to Humanscale's in-house legal counsel, summarising that advice and a draft dismissal letter prepared by Humanscale’s lawyer with the lawyer's comments redacted.

Ms Kasongo sought to rely on the lawyer’s comments in an un-redacted version of the draft dismissal letter, which Humanscale resisted on the basis that those comments were legally privileged. The Employment Tribunal ruled that the redacted parts of the draft dismissal letter were covered by legal advice privilege and therefore could not be relied on by Ms Kasongo.

Ms Kasongo appealed to the Employment Appeal Tribunal. The Employment Appeal Tribunal found that in disclosing the note and the email, Humanscale had waived privilege in respect of both documents. The question for consideration was then whether the redacted parts of the draft dismissal letter were part of a separate transaction, meaning that Humanscale could maintain privilege in respect of that letter. The Employment Appeal Tribunal found that the three documents were all part of the same transaction, being the giving of legal advice about Ms Kasongo's dismissal. As such, in disclosing the note and email, Humanscale had waived privilege in relation to the redacted parts of the draft letter.

Comment

Legal privilege is often a powerful tool giving institutions the freedom and confidence to speak to lawyers and lawyers to give advice without fear of the communications being disclosable. The Curless and Kasongo cases highlight the absolute nature of legal privilege and the care that should be taken by those seeking, giving and utilising legal advice, to avoid legal privilege being lost.

The Curless case reasserts the high hurdle required for iniquity in order for privilege to be disapplied on this ground. Whilst it would be very rare that a claimant would become aware of the legal advice given to his or her employer, the case highlights the subtle differences between advising on a course of action that would be unlawful and giving advice on the risks of a certain course of action being held to be unlawful. Whilst the Court of Appeal’s decision supports the position that the iniquity exception will be unlikely to apply in the giving of general day to day advice on the employment law risks of different routes open to an employer, advisers need to be mindful of potential breaches of their higher duty to the court and professional rules. Further, the potential for reputational damage and personal liability arising out of advice that oversteps the mark and veers into advising to pursue an unlawful route.

The Kasongo case serves as a useful reminder that legal privilege can be waived in a number of ways, often inadvertently, and that waiving privilege in relation to some documents may have a knock on effect of also waiving privilege in relation to other documents. Whilst the rule prevents unfairness and misunderstanding through “cherry-picking” privileged communications, it will be a question of fact in each case as to whether the communications are associated as part of the same transaction.

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