A leaked email between lawyers and an overheard conversation between lawyers in a pub, both concerning redundancy, were not admissible as evidence in disability discrimination proceedings in the Employment Tribunal. The leaked email was privileged, and there was an insufficient connection between the overheard conversation and the email to allow the conversation to be used as an aid in interpreting the email. The Court of Appeal left open the question of whether the iniquity principle (which is a bar to privilege) applies beyond circumstances involving crime or fraud: Curless v Shell International Ltd [2019] EWCA Civ 1710

A claim for disability discrimination

A senior lawyer (the claimant) at a large company suffered from a disability. From 2011, the company had expressed concerns about the claimant’s performance at work, and in August 2015 the claimant brought a claim against the company alleging that the actions taken in respect of his alleged performance issues gave rise to unlawful disability discrimination and/or a failure to make reasonable adjustments (the First Claim).

In November 2016 the claimant was issued with notice of termination, allegedly by reason of redundancy, with his employment ending on 31 January 2017.

Further claim for disability discrimination, victimisation and unfair dismissal

In March 2017, the claimant brought a second claim alleging further disability discrimination, victimisation and unfair dismissal (the Second Claim). In the Second Claim, the claimant referred to the following:

• A pub conversation: the claimant overheard a conversation in a pub between two people whom he understood to be lawyers from Lewis Silkin. The individuals mentioned a senior lawyer at the company who had commenced a discrimination claim, and allegedly stated that this individual’s “days are numbered” as the company planned to use the context of a redundancy exercise to terminate his employment.
• An anonymous email: the claimant was (anonymously) sent an email between a senior in-house lawyer at the company and a lawyer at Lewis Silkin. In the email, the in-house lawyer reported that she had told the company’s General Counsel that there were likely to be redundancies of legal personnel “including the individual” (who was acknowledged to be the claimant), and that:

“If done with the 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…otherwise we risk impasse and proceedings with on-going employment with no obvious resolution.”

The company applied to strike out references to the pub conversation and the email on the basis that these communications were privileged. The Employment Tribunal (the ET) had to consider whether these communications engaged the “iniquity principle” which prevents a party from relying on privilege where a communication or document has come into being for the purpose of furthering a crime or fraud.

The ET found both the pub conversation and the email to be privileged. The ET also held that discrimination and victimisation are torts which do not engage the iniquity principle, as they do not constitute a crime or fraud. The Employment Appeals Tribunal (EAT) took a different view, finding that the iniquity exception applied. The company appealed to the Court of Appeal (the court).

Email was normal employment advice

The court held that the email was the sort of advice which employment lawyers give “day in day out”. This was not advice to act in an underhand or iniquitous way. The email was legal advice on the redundancy process and how this could be applied to the claimant with appropriate safeguards. The author was considering two alternative risks:

• if the processes led to the claimant being selected for redundancy, there was a risk that he would argue that the decision was unfair and discriminatory; and
• if the claimant was not considered for redundancy and remained in employment, the First Claim would continue anyway and there was a risk of an impasse.

The email remained privileged and could not be relied on in support of the claimant’s case.

Pub conversation could not be used as an interpretive aid

The court held that this had been relied on by the claimant only in relation to how the email should be interpreted, and there was insufficient connection between the email and the pub conversation for the latter to be used as an aid in interpreting the former.

Consequently, the appeal was allowed and the relevant paragraphs in the Second Claim were struck out.

Scope of the iniquity principle

As the court did not consider that the email was advice to act “in an underhand or iniquitous way”, the scope of the iniquity principle did not arise for decision. Obiter, the court did recite the company’s arguments that the iniquity principle be confined to instances of dishonesty, and that the decision in BBGP v Babcock [2010] EWHC 2176 (Ch) went too far in suggesting that the iniquity principle was engaged in any circumstances “which the law treats as entirely contrary to public policy”. However, the court remarked that this was “an important argument, which will no doubt have to be decided one day; but not in this case”.

Anonymity

The company sought an anonymity order in respect of the proceedings, arguing that if the 29 April email was excluded from evidence, the mind of the judge hearing the substantive dispute would nevertheless be tainted by knowledge of the 29 April email gained through learning about the hearing and appeals on this point. The court rejected this argument on the basis that judges are used to excluding evidence which is inadmissible from their consideration of the merits, and anonymity would run contrary to the principle of open justice.

Comment

As well as a timely reminder ahead of the festive season that the pub is not an appropriate forum in which to discuss sensitive HR or legal issues, there are a couple of key takeaways from this case:

• the fact that the EAT interpreted the email so differently from the ET and the court demonstrates the importance of drafting advice unambiguously. Legal advice should clearly set out the options available to the employer and the associated risks so that it cannot be (mis)construed as advice on how to act in an underhand way. This is especially important given that the scope of the iniquity principle remains unclear; and
• parties to litigation should not assume that anonymity orders will be granted by the court, even in circumstances where lower instance proceedings have been conducted in private or been the subject of an anonymity order. The court has made it clear that there is no general exception to open justice where privacy or confidentiality is in issue, and derogations may only be made in exceptional cases.