Employment Law Speed Read – 20/08/18
20th August, 2018
This week we look at a case which considers if legal professional privilege could be waived due to deception.
X v Y Ltd
In X v Y Ltd the Employment Appeal Tribunal (EAT) considered whether a leaked email and an overheard conversation could have legal professional privilege waived due to deception.
X was a lawyer who had worked for Y Ltd for 27 years until he was dismissed in January 2017, purportedly for the purposes of redundancy following restructuring by his employer. X suffered from type 2 diabetes and obstructive sleep apnoea and had previously submitted claims for disability discrimination and for victimisation against Y Ltd.
X was anonymously sent a leaked email between Y Ltd and its solicitors in which the solicitor set out how Y Ltd might avoid legal action when attempting to dismiss X by placing his dismissal in the context of the company’s wider restructuring and X’s redundancy.
Subsequently X overheard two women in a pub referring to a complaint by a senior lawyer at Y Ltd and discussing a ‘good opportunity’ to manage the senior lawyer out by redundancy.
X brought a claim for unfair dismissal which referred to the email and overheard conversation (the “Evidence”) as evidence that his redundancy was a sham and dismissal therefore unfair.
Employment Tribunal (ET)
The ET had to consider whether the Evidence had the protection of legal professional privilege. The Judge held that the email constituted legal advice aimed at avoiding rather than evading legal action and that this was routine legal work which did not raise the question of iniquity.
As a result, the ET struck out the parts of X’s claim relating to the Evidence. X appealed for the striking out to be set aside.
Employment Appeal Tribunal
The EAT held that the Evidence was not subject to legal professional privilege as its purpose was to essentially defraud X by concealing the true reasoning behind his dismissal in order to avoid X’s continuing complaints and his difficulties with Y Ltd. A strong prima facie case had been established of an attempted deception of both X and the ET and the EAT held that Y Ltd should not be allowed to use legal professional privilege as a cloak to allow its deception to succeed.
The email did not provide any legal advice in relation to making X redundant and focused solely on how the ostensibly legitimate reason for dismissal of redundancy could be used to rid Y Ltd of the issue of moving on X without opening itself up to further claims. Had the email simply advised Y Ltd of the risk of a claim by X and advised how to fairly carry out the redundancy process then privilege would have applied.
The EAT treated the overheard conversation with much less importance than the email but held that legal professional privilege could not be claimed.
This case makes clear that there are exceptions to legal professional privilege and that communications between parties and their legal advisers cannot just be assumed to be privileged regardless of their contents.
However, this does not mean that commercially sensible advice should be avoided provided it is a legitimate form of advice and does not seek to defraud other parties.
If you have any questions on the above and how it will affect you, please do not hesitate to get in touch with a member of our employment team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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