Legal Privilege – When is it Lost?

Legal privilege refers to confidential communication (written or oral) between a lawyer and his/her client, in a process of seeking and providing legal advice. This means that such correspondence cannot be used by a third party or be referred to in courts.
There are however some exceptions, and the recent decision in X V Y [2018] UKEAT/0261/17 provides further guidance as to when such information can be disclosed and relied on as evidence in courts or Tribunals.

In this case the Respondent (employer) tried to get rid of the Claimant (employee), by using redundancy as “a cloak” to dismiss him to avoid dealing with his complaints in relation to disability discrimination. The Claimant had Type 2 Diabetes and Obstructive Sleep Apnoea. Having failed to make reasonable adjustments for the Claimant, the Respondent announced a program of voluntary redundancy. As the Claimant did not manage to secure an alternative position with the Respondent, he was placed in a redundancy consultation process.

The Claimant overheard a conversation between two solicitors in the pub, who discussed the Claimant’s position at the Respondent’s. It was mentioned in this conversation that there was a ‘good opportunity’ to manage the Claimant out by severance or redundancy. This communication was used by the Claimant later to interpret the email which he received anonymously. This email was marked as “Legally Privileged and Confidential” and stated that “there is at least a wider reorganisation and process at play that we could put this (redundancy) into the context of”.

Legal Privilege and Iniquity

The Claimant brought a Claim for disability discrimination, victimisation and unfair dismissal relying on the above email evidence. While the Employment Tribunal stoke out the Claim, as this evidence was subject to legal privilege, the Claimant successfully appealed this decision claiming that this advice constituted a cloak for disability discrimination, facilitating iniquity.

The Slade J pointed out that depending on the content legal advice can constitute iniquity.

Slade J held:

“Advising that taking a certain course of action runs a risk of being held unlawful whether the illegality be breach of contract, discrimination or even breach of fiduciary duty is not in itself iniquitous. Giving advice that a certain course of action which may be unlawful could be taken shades into iniquity. Advising how a fraud could be perpetrated as in Crescent Farms would clearly be an iniquity, as would advice on how to breach a fiduciary duty as in Gamlen.”

In order to identify whether advice is subject to legal privilege, one should assess the way such information is formulated. It is clear that advice sought for the purpose of effecting iniquity, cannot be covered by legal privilege.

Slade J held:

“A strong prima facie case has to be established of an iniquity which reaches the high threshold of something of an underhand nature which is entirely contrary to public policy. Each case depends on its own facts.”

In the present case, strong prima facie iniquity was present. Therefore, the Claimant could rely on the email, as evidence in support of his case. Slade J also confirmed that legal privilege cannot be claimed for an overheard conversation in the pub.

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