Under English law, disclosure obligations are far-reaching and parties to a dispute are required to make available to each other all material (documents, communications, recordings etc.) that are relevant to the dispute in question, unless such material is ‘privileged’. Privilege is a legal right under English law which, in certain circumstances, allows individuals, businesses and other legal entities to withhold material that are confidential and sensitive in nature. However, if any material is created with a view to (or if it evidences the intention of) furthering an illegal purpose then legal privilege will not apply. This is known as the ‘inequity’ exception.
The application of the inequity exception was recently considered by the Employment Appeal Tribunal in Abbeyfield (Maidenhead) Society v Hart [2021] UKEAT 00162/21/1908. In this case, the Claimant, Mr Hart, was a former employee of the Respondent – a charity which operates care homes and care services. Mr Hart, who was dismissed for gross misconduct following an altercation with a gardener at work, issued a claim in the Employment Tribunal (ET) for unfair dismissal, wrongful dismissal, discrimination on grounds of age, race, sex and/or disability, harassment and victimisation. At the disclosure stage the Employment Tribunal had ordered the employer to disclose to Mr Hart all documents and other material relating to the incident between Mr Hart and the gardener. The employer resisted disclosure of certain documents on the basis that these were covered by litigation privilege. The ET agreed that most of those documents were covered by privilege but held that one email was disclosable under the inequity exception. This was an email between the employer’s HR consultant and Mr Cager, a senior officer at the employer, in which Mr Cager said: “Mr Hart’s rudeness and gross insubordination has caused major problems to both Donna and Shirly and this cannot be allowed to continue any longer. He will not therefore be returning to Nicholas House under any circumstances.” The ET held that this email was not privileged because it showed that the employer unlawfully had decided to dismiss Mr Hart before the start of the disciplinary process rather than make the decision after the conclusion of the process.
The employer appealed to the Employment Appeal Tribunal (EAT) against the finding that Mr Cager’s email was disclosable under the inequity exception. The EAT overturned the decision and held that the email was protected by litigation privilege and did not fall within the inequity exception even though it contained an indication that dismissal had already been decided. This was because the employer did not seek, and the adviser did not give, advice on how to act unlawfully. The EAT went on to say that the communication was the sort of frank instruction that a party may feel able to give in a privileged communication.
This case reaffirms the importance of legal privilege, and gives a clear reminder of the circumstances in which legal privilege can be asserted. Parties should take great care when sharing documents to ensure they do not inadvertently waive privilege. In particular, employers should carefully consider any Data Subject Access Requests and identify documents which it may be entitled to resist disclosure of on grounds of privilege. It is important to bear in mind that there are two types of privilege, namely legal advice privilege and litigation privilege:
Legal Advice Privilege
Legal advice privilege protects the confidential communications between lawyers and their clients, which is for the purpose of seeking or giving legal advice. Legal advice privilege applies to anyone acting in their capacity as a lawyer and are authorised to practise under the rules of a relevant regulator. In the context of legal advice privilege, ‘client’ means those individuals who are authorised to seek and obtain legal advice in relation to the particular matter in question. Generally, communications outside the designated ‘client team’ and their lawyer are not privileged. This means that where the client is a company, it should not be assumed that documents produced by employees, who are not usually considered part of the ‘client team’, and sent directly to lawyers will be privileged.
It is important to bear in mind that draft letters or factual summaries prepared by a client which are not produced for the primary purpose of seeking legal advice will not be covered by legal advice privilege, even if they are later passed on to lawyers to obtain advice. Also, since the dominant purpose of the communications must be to seek and obtain legal advice, simply copying a lawyer on internal correspondence with a view to attract legal advice privilege will not work.
Litigation Privilege
Litigation Privilege applies to any documents or communications between a lawyer, its client or a third party, created for the primary purpose of preparing for pending or current litigation. Litigation has to refer to adversarial proceedings meaning it will exclude internal grievance and disciplinary proceedings or fact-finding inquiries and investigations. The litigation must be actual or reasonably in prospect. It is not sufficient that there is a slight possibility that sooner or later someone might make a claim. Unlike legal advice privilege, a lawyer does not need to be party to the communications. Recent case law has shown that a company’s own written record of advice and communications may also attract litigation privilege if they reveal any legal advice.
The documents and communication must be created for the main purpose of obtaining information or advice in connection with litigation. Documents which fall outside of this, such as internal board discussions of a strategic nature not relating to such information or advice will not be covered by litigation privilege. However, documents are often created for more than one purpose. For example, commissioning a report for an investigation following an accident to review and improve procedures, whilst at the same time anticipating litigation. If the report is not prepared for the dominant purpose of litigation, litigation privilege will not apply.
In some circumstances it is possible to share privileged material confidentially with outside parties which have a common interest in it, for example other group companies or insurers. Sometimes, privileged material can even be shared with third parties without such a common interest, provided that there is a clear, limited purpose for the sharing of the information. In such circumstances it may be possible to share the material by way of a ‘limited waiver of privilege’ as this will allow the disclosing party to retain privilege in the material. It is important to ensure that any limited waiver of privilege is in writing.
Great care must be taken before sharing any privileged information, whether it falls into the category of legal advice privilege or litigation privilege, and if in doubt, specialist advice should be obtained to prevent the loss of privilege all together.
The material contained in this article is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.
© Miller Rosenfalck LLP, January 2022
