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Legal Advice Privilege and Dismissal

Two recent cases have cast light on the issue of legal professional privilege in employment disputes.

In Curless v Shell International Ltd [2019] EWCA Civ 1710 the Claimant sought to rely on two communications by lawyers to argue that his dismissal ostensibly by reason of redundancy was unfair.

One was an email stating that a restructuring exercise was:

…their best opportunity to consider carefully how such processes could be applies [sic] across the board … including the individual. If done with appropriate safeguards and in the right circumstances, while there is always the risk he would argue unfairness/discrimination, there is at least a wider reorganisation and process at play that we could put this into the context of. I felt in the circumstances this is definitely worth considering even if there is the inevitable degree of legal risk which we would try to mitigate. Otherwise we risk impasse and proceedings with ongoing employment with no obvious resolution.

The other was an subsequent conversation overheard in a pub. The Employment Tribunal held that individuals apparently from the Respondent’s external law firm had referred to the Respondent wanting an existing Tribunal complaint ‘to be handled firmly or sternly’, and that the relevant individual’s ‘days were numbered as there was now a good opportunity to manage him out by severance or redundancy in a big reorganisation exercise that was underway…’

The Court of Appeal held that the email was legal advice and did not fall within the iniquity exception to legal advice privilege. Properly construed, the email gave legal advice on how redundancy processes might be applied to the Claimant “with appropriate safeguards and in the right circumstances”. There was nothing to suggest any further advice would be ‘anything other than entirely conventional’. It was ‘the sort of advice employment lawyers give “day in, day out” in cases where an employer wishes to consider for redundancy an employee who (rightly or wrongly) is regarded by the employer as underperforming’.

Nor could the pub conversation assist the Claimant. The above was sent approximately a fortnight before the conversation and there was no evidence that the speaker had seen it. The advice therefore could not be ‘tainted by a conversation involving gossip from someone else after the event.’

In Kasongo v Humanscale UK Ltd [2019] UKEAT/0129/19 the employer waived privilege to rebut a claim of pregnancy discrimination. It sought to show that it had obtained advice on terminating the Claimant’s employment before she had told them she was or might be pregnant. To do so, they disclosed a telephone note and an email containing advice about termination prior to that date. They also disclosed a draft dismissal letter with redacted comments. The Claimant discovered, and sought to admit, those comments.

 The Employment Appeal Tribunal held that the redacted comments were admissible insofar as they were relevant to the Claimant’s discrimination claim. Specifically, the Respondent had to disclose a comment on the draft letter asking it to confirm the accuracy of its instructions and whether it was comfortable with the wording used, with the aim being ‘to do enough to show we’ve not dismissed her for any discriminatory reason’.

The parties effectively accepted that without disclosing that communication, there was a risk of the Tribunal being presented with a partial or misleading picture. However, the Respondent sought to argue that the comments were still privileged because they were not part of the same “transaction” as the earlier documents. The EAT disagreed. The 6-day gap between the communications did not make them separate transactions. They were ‘part of the same continuum and transaction of advising on the dismissal of the Claimant and possible legal implications.’ The redacted comments were ‘inextricably linked’ to the earlier emails and fell to be admitted in evidence.

Observation and Comments

Both of these cases are orthodox applications of the law of privilege rather than any step-change in the law. Their interest lies in that they consider advice that all employment lawyers are likely to encounter at some point.

The idea that such communications will remain confidential in all circumstances cannot be assumed. In cases where the chronology is important it is often sensible, as happened in Kasongo, to waive privilege, to show that a decision was taken, or at least considered, before the event the employee says is its real cause. Kasongo is a reminder that this cannot be an exercise in cherrypicking – once the decision is taken to waive privilege, the doctrine of “collateral waiver” requires that all material that relates to the same “transaction” or “issue” must also be disclosed where it is necessary to avoid unfairness or misunderstanding. Attempts to overly narrow the definition of “transaction” are likely to be received critically. If the documents do not all go one way, a careful decision needs to be taken about whether the benefits of waiving privilege outweigh the disadvantages.

In other cases, disclosure may occur inadvertently. The email in Curless was leaked to the Claimant, and Ms Kasongo was able to uncover the comments in her draft letter of dismissal notwithstanding their redaction. Even if a party is able to prevent a privileged communication being admitted in evidence, the other side will still have seen it and may (rightly or wrongly) be emboldened in their assessment of the case based on their interpretation of the document. The practical advice is therefore always to write on the assumption that your advice may subsequently be reviewed by a Court or Tribunal, even if only to assess its admissibility. Whilst Judges will generally take a sympathetic and realistic approach to how lawyers express themselves, it is better to draft with clarity from the outset to limit the risk of subsequent satellite litigation or misinterpretation.

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