A recent decision in the UK Court of Appeal has provided guidance in the area of privilege in employment claims.

In Curless v Shell International Ltd, the Court of Appeal had to consider whether legal advice privilege should be disapplied to an email on the basis that the advice fell within the “iniquity principle”.

Legal advice privilege applies to confidential communications between lawyers and their clients. However, legal advice privilege does not apply where the advice is iniquitous, i.e. where the communication or document came into being for the purpose of furthering a criminal or fraudulent design. In this case the EAT had extended iniquity to apply to advice which was alleged to support unlawful conduct.

The case involved an in house lawyer who was employed by Shell from 1990 until his dismissal allegedly for redundancy in January 2017. The employee, who suffers from type 2 diabetes and breathing problems, had issued tribunal proceedings and raised a grievance alleging disability discrimination prior to his dismissal for redundancy.  Following his dismissal he raised a second tribunal claim alleging disability discrimination, victimisation and unfair dismissal.

Part of his evidence referred to an email marked “Legally Privileged and Confidential” from the external legal adviser to the employer client. The email gave advice to the client on the redundancy process and advice on dismissing the employee in the context of this process. To support this the employee also referred to an overheard conversation in a pub which the employee alleged referred to him.   The Employment Tribunal held that the paragraphs in the communication should be struck out as the employer was entitled to claim legal advice privilege.  However, the  Employment Appeal Tribunal allowed the employee’s appeal, holding that the key question was whether the interpretation of the email was that the advice recorded simply pointed out the risk of claims if the claimant was selected for redundancy or whether it went further and advised that the redundancy can be used as a cloak for dismissing the claimant.  The EAT held that there was a strong prima facie case that what was being advised on was not only an attempted deception of the claimant but also, if persisted in, deception of an Employment Tribunal in anticipated legal proceedings.

The Court of Appeal rejected the EATs decision holding that the advice given reflected the sort of advice which employment lawyers give “day in, day out” where an employer wishes to consider an employee for redundancy. It set out how such processes could be applied to the employee with “appropriate safeguards and in the right circumstances”.  Although the email did not set out the safeguards and the circumstances, there was nothing to suggest that the adviser would not have provided further clarification if requested.  As such it was not advice to act in an underhand or iniquitous way and the iniquity exception did not apply.  Accordingly the email remained privileged and could not be used by the employer to support his case. With regard to the overheard conversation, it was held that it cannot be used to interpret the email since there was no evidence that the woman whose conversation had been overheard had seen the email. The case would now be remitted for hearing without the privileged information.

The case shows the high hurdle for iniquity for privilege to be disapplied. However, whilst it is rare for a claimant to become aware of communications in this way, advisors should be careful as to the advice which they give to clients to ensure that it does not fall within the iniquity principle by pursuing an unlawful route and that their advice is not coloured by any iniquitous meaning or objective.

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