The EAT has considered when legal advice may fall foul of the principle of "iniquity" and lose the protection of legal privilege. In this case, an email sent by an in-house lawyer was interpreted by the EAT as advice on how to cloak what would otherwise be a discriminatory dismissal as a redundancy dismissal. This strongly suggested that the advice had crossed the line into something of an underhand nature which was contrary to public policy and, as such, privilege was lost. This is a significant judgment on the limits of legal advice privilege which calls into question how lawyers should frame legal advice on discrimination, although it is important to note that the EAT reached its decision on the basis of the language of a particular email which is not fully set out in the decision.
In X v. Y Ltd the claimant (an in-house lawyer) was dismissed on grounds of redundancy, but claimed that his dismissal amounted to disability discrimination, victimisation and unfair dismissal. He wanted to rely on an email sent by another member of his employer's legal team to third lawyer who was seconded to the legal team. The full text of the email is not revealed in the judgment, as its admissibility is contested. In the claimant's opinion, the email in question referred to advice on how they could "cloak" his dismissal as a dismissal for redundancy rather than being a disability related dismissal. The claimant was apparently seen as troublesome, having repeatedly raised allegations of disability discrimination and having already started Tribunal proceedings, and it was suggested that the email related to how to avoid the appearance of a disability-related dismissal or victimisation.
In particular, the email in question stated that "there is at least a wider reorganisation and process at play that we could put this into the context of" and "otherwise we risk impasse and proceedings with ongoing employment with no obvious resolution". The employer asserted that the advice was privileged and could not be relied upon. However, the claimant said that the email amounted to advice on how to discriminate and cover it up and that this was therefore a case of iniquity, meaning privilege was lost.
To support his interpretation of the email, the claimant also wanted to rely on a conversation he had overheard in a pub between two (unidentified) women, one of whom said that she was dealing with a complaint by a senior lawyer at the employer and that there was a good opportunity to manage him out in a reorganisation.
The EAT agreed that the iniquity rule (i.e., that advice sought or given for the purpose of iniquity is not privileged) normally applies in cases of advising on how to commit fraud or other criminal acts or how to breach fiduciary duties, whereas discrimination will often be of a lesser degree. However the EAT held that the facts of some discrimination "may be so unconscionable as to bring it into the category of conduct which is entirely contrary to public policy".
The judgment suggests that there is a spectrum, from advising that a certain course of action might be discrimination (which would not be iniquitous) through to advising that the employer should discriminate (which, assuming the discrimination is sufficiently unconscionable, would be iniquitous). The judgment is clear that advice on how to commit iniquitous discrimination would also be iniquitous. The judgment also states that giving advice that an iniquitous course of action could be taken "shades into iniquity" although the EAT did not get into the detail of where the line would be crossed.
The EAT ruled that the email in this case was clearly advice on how to seize the opportunity of a redundancy exercise to dismiss an employee who had been raising discrimination complaints, and this amounted to advice on how to commit discrimination. The EAT said that the email concentrated on how the redundancy could be used to rid the employer of ongoing allegations of discrimination and concerns about the claimant's underperformance which the claimant considered to be disability-related. In the EAT's view, the claimant had established a strong case of attempted deception of both the claimant and (potentially) a future Employment Tribunal. This elevated the email to the status required to establish a strong prima facie case of iniquity.
The EAT also ruled that the conversation in the pub was not protected by privilege but that the Tribunal was right not to take it into account when interpreting the email. It was not authorised by the employer (so could not assist in deciding their position), it took place about three weeks after the email, the speaker was not identified and no note was taken.
Lawyers should be careful about how they frame their legal advice on discrimination risks (particularly written advice), especially in situations like this one where an employee is being dismissed for a potentially fair reason (redundancy, performance etc.) but there are issues and/or allegations of discrimination in the background. Lawyers should also take care not to discuss confidential information in public places.
It is important to note that the EAT reached this decision on the basis of the structure and language of the email in question, the text of which is not fully revealed. In the EAT's opinion, the email went further than advising that a certain course of action ran a risk of being held unlawful (which is obviously commonplace when giving legal advice and would not be iniquitous). Essentially the EAT seems to have regarded the email as amounting to advice on how to put forward a sham justification for the claimant's dismissal.
It is also worth noting that, in this case, the email fell into the employee's hands because an anonymous sender posted him a printed copy. It will be necessary for employers to assess whether advice has lost its privilege when dealing with disclosure or data subject access requests but in many cases it will be difficult for employees to challenge the assessment.
This cautionary tale may therefore mostly turn on its particular facts, which are not fully revealed and involve disputes within an in-house legal team. Nonetheless, the decision calls into question how lawyers should respond to requests for advice on, for example, processes or decisions which could be held to be discriminatory or options for reducing the risks of discrimination claims. It underlines the need for care not to be seen to be advising on how to achieve something which could be held to be iniquitous.