Eversheds LLP v Gray

When deciding whether a preliminary hearing should be private under rule 16(1)(b), the Employment Tribunal must identify the evidence or representations to be heard, determine whether they are likely to contain confidential information within the rule, and then exercise its discretion by balancing open justice against the need to preserve confidentiality.

Genuinely without prejudice settlement discussions are confidential. Their protection serves the interests of justice because parties must be able to negotiate privately without fear that negotiations will be used as admissions at trial. Where the rule is engaged, those interests may justify a private preliminary hearing, while preserving public determination of the substantive dispute.

Eversheds LLP appealed against an Employment Judge’s refusal to order that a pre-hearing review concerning the admissibility of alleged without prejudice communications be held in private. The Employment Judge had concluded that exclusion of inadmissible material at the substantive hearing would sufficiently protect confidentiality and that private confidence alone did not justify a private hearing.

The Employment Appeal Tribunal, sitting with a single judge, considered whether the Employment Judge had properly addressed rule 16(1)(b) of the Employment Tribunal Rules of Procedure 2004 and whether the appeal should be remitted or determined directly.

1. The appeal was allowed and the Employment Judge’s ruling was set aside. The Employment Appeal Tribunal identified two material errors of approach: there was no clear finding whether without prejudice material was confidential for the purposes of rule 16(1)(b), and no finding whether the evidence was likely to consist of such confidential information.
2. Rule 16(1)(b) requires a structured inquiry. The Tribunal must ask whether evidence or representations will be heard; whether they are likely to contain information communicated in confidence, or obtained as a consequence of confidence; and, if so, whether discretion should be exercised in favour of a private hearing.
3. True without prejudice discussions are confidential. In deciding whether it was likely that the discussions would be found genuinely without prejudice, the EAT adopted the approach to “likely” applied in, for example, section 129 of the Employment Rights Act 1996, as discussed in Taplin v Shippam [1978] IRLR 450. On the pleaded issues, the confidentiality threshold was satisfied and rule 16(1)(b) was engaged.
4. The discretion required a balance between the importance of public hearings and the Article 6 right to a fair and public hearing, on the one hand, and the public policy protecting confidential settlement negotiations, on the other. That protection serves the interests of justice and falls within the Article 6 proviso.
5. The EAT exercised its power under section 35(1) of the Employment Tribunals Act 1996 and substituted a direction that the pre-hearing review be held in private. If the communications were ultimately found not to be protected, they would remain admissible at the full hearing, which would be public.

• Employment Appeal Tribunal: allowed the appeal against the Employment Judge’s refusal to hold the pre-hearing review in private, set aside that ruling, and substituted a direction that the pre-hearing review be held in private.
• Employment Tribunal: refused the application for a private pre-hearing review on 12 October 2011.