This was one of two questions explored in the Employment Appeal Tribunal decision of X v Y Limited . In addition to the matter of legal privilege, the other question posed to the EAT was whether emails, which advised that potentially endorsing unlawful reasons for dismissing an employee could be considered to be “facilitating an iniquity”, i.e. attempting to provide advice on how to evade legal obligations.
The legal position on legal privilege
Legal privilege is one of the key tenets of a solicitor’s role; it is extremely important for both solicitor and client to be able to rely on legal privilege to prevent opposing sides from being party to private discussions. It would be a great disadvantage if frank discussions between solicitors and clients had to be disclosed at a tribunal hearing.
It could potentially prevent a client from making full and frank disclosure to their adviser, with that adviser in turn being inhibited from giving advice when in possession of the full facts. There are very limited circumstances in which privilege will not apply to advice and, for the purpose of this claim, one of the relevant grounds was the ‘iniquity principle’. Iniquity applies where privileged material is created, in an attempt to conceal and further a crime (here, crime includes civil fraud; it is used in a wide sense and can include unlawful conduct).
Background to the case
The claimant was a lawyer working for the respondent. He suffered from Type 2 diabetes and sleep apnoea. The respondent started a performance management review on the claimant, as his performance was considered unsatisfactory. The claimant claimed that his employer’s measures amounted to disability discrimination and subsequently brought a grievance against them, issuing a claim for this.
In April 2016, the respondent began making redundancies. During the redundancy consultation process, the claimant overheard a conversation by another employee about someone employed by the respondent who had made a complaint of disability discrimination and raised a grievance. The claimant also received an anonymous email, in which senior employees (one of whom was an in-house solicitor) discussed how to dismiss him using the redundancy process. The claimant was subsequently dismissed by the respondent, who asserted that the reason for dismissal was redundancy.
The case at the Employment Tribunal
The claimant brought a claim for unfair dismissal, victimisation and disability discrimination. The respondent sought to have references to the email and the overheard discussion struck out, on the basis that this amounted to legally privileged advice.
The employment judge held that the email was subject to legal privilege and its contents concerned how the respondent could avoid – not evade – legal action brought by the claimant. The judge struck out all reference to the offending email and accepted that the conversation overheard in the pub amounted to privileged advice, so did not amount to an iniquity.
The case at the Employment Appeals Tribunal
The EAT held that the tribunal had erred in their decision. The email was not protected by legal privilege, as the EAT found that the claimant’s dismissal was being “used as a cloak” to dismiss the claimant on discriminatory grounds. The iniquity principal therefore applied. Essentially, the EAT found that the advice went beyond ‘if you do this, you may face litigation’, to register instead as ‘here is a way you can potentially avoid litigation for unlawful conduct.’ This was sufficient to establish prima facie iniquity, though the EAT was mindful of being clear that determination of iniquity in this instance was not final, as they were only considering the narrow point of whether this evidence should be considered rather than deciding the actual outcome of the claim. The EAT also found that legal privilege could not extend to the overheard pub conversation.
Therefore, the tribunal’s decision was set aside and the claimant’s case allowed to continue unimpeded, with all reference to the email and conversation remaining.
Effects and conclusion
The points to take away from this case are:
- Emails that seek to facilitate a potential iniquity will not enjoy legal privilege; and
- Legal privilege cannot extend to conversations in public places.
These are important points for both solicitors and employees; it is worth noting that where an employer approaches a solicitor specifically to ask about how to dismiss an employee, there is a substantial risk that such advice will not be privileged.
From an employers’ perspective, it would be best to reinforce to employees the importance of avoiding discussing potentially sensitive workplace issues in the pub or other public places, as there will be limited legal protection for any such discussions.