Court of Appeal rules that controversial email was privileged

Many will welcome the decision to uphold legal advice privilege in relation to a confidential communication between a lawyer and client in Curless v Shell International Ltd (formerly X v Y).

Overturning the EAT decision, the CoA ruled that an email sent by a lawyer to Shell about the dismissal of an employee, Curless, was covered by legal advice privilege.

The controversial email contained advice that a genuine redundancy exercise could be used as an opportunity to dismiss Curless who had made complaints of disability discrimination.

The general rule is that legal advice between a client and their lawyer is privileged and cannot be disclosed in litigation. However, there is no legal advice privilege where the adviser is guilty of “iniquity”, which the EAT described as “something of an underhand nature where the circumstances required good faith, something which commercial men would say was a fraud or which the law treats as entirely contrary to public policy...”.

The EAT held that there was a strong prima facie case of iniquity because the email “gave advice on how to cloak what would otherwise be a disability discrimination dismissal as a dismissal for redundancy”. The CoA disagreed.

The CoA ruled:

• This was “day in, day out” advice for Employment lawyers in cases where an employer wishes to consider for redundancy an employee who (rightly or wrongly) is regarded as underperforming.
• The advice was not underhand or iniquitous; the scope of the crime/fraud exception does not arise in this case.
• Legal professional privilege cannot depend on a retrospective evaluative judgment by the court on whether something is “sufficiently iniquitous” to prevent privilege attaching to the document.
• Despite the competing public policies, the balance was struck in favour of legal professional privilege.

Anonymity order

The CoA did not maintain the anonymity order made at the EAT. Counsel for Shell argued that if the appeal succeeded, it would be important that confidentiality in the relevant emails should be maintained and the judge conducting the future substantive hearing in the ET should not know about them.

The CoA decided that:

• The anonymity order would be lifted.
• The principle of open justice is more important.
• Judges are accustomed to excluding evidence which is inadmissible when they consider the merits and make decisions.

The case will now be remitted to the Tribunal for its full hearing whereby the Judge will, presumably, have to ignore the contents of the email on the basis that privilege is restored.

General practical tips on privilege

• Mark communications “Private & Confidential and Privileged” where appropriate - do not mark every communication with in-house counsel privileged indiscriminately.
• Take care with the scope of what constitutes confidential lawyer/client communications: it is not simply to give or obtain legal advice and can include an exchange of information to put a matter in context or to enable advice to be given, but pure business advice provided by lawyer could fall outside the scope.
• Merely copying in-house counsel on general business communications will not attract privilege.
• Assess legal advice privilege on a case-by-case basis; it will depend on the facts.
• Privilege should not be lost where the lawyer advises that a certain course of conduct risks being held unlawful.
• Privilege will be lost where the lawyer advises on how to commit a fraud or breach of fiduciary duty.
• Privilege may be lost where the lawyer advises the client to take a course of action which may be unlawful eg advocating the client to commit the tort of discrimination. But, in light of the CoA decision, advocating a course of conduct which may be discriminatory is not sufficient to lose privilege unless the acts are clearly contrary to public policy and dishonest/iniquitous.