X v Y Limited

Legal advice privilege does not protect advice sought or given to facilitate iniquity. The party seeking disclosure must establish a strong prima facie case of conduct reaching the high threshold of underhand conduct entirely contrary to public policy.

Discrimination is not invariably such iniquity. However, advice to use a genuine redundancy exercise as a cloak for dismissing an employee because of disability-related complaints may establish that threshold, particularly where it would also facilitate deception of an Employment Tribunal in anticipated proceedings.

The claimant, a lawyer employed by the respondent, had made disability discrimination allegations and sought reasonable adjustments. During a wider redundancy exercise, he received anonymously a privileged email from the respondent's legal department concerning him.

In his second Employment Tribunal claim for disability discrimination, victimisation and unfair dismissal, he relied on that email and an overheard conversation. The Employment Judge held that the email remained protected by legal advice privilege, rejected the iniquity exception, and struck out parts of the claim under Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013.

The claimant appealed on the meaning of the email and whether its advice disclosed a strong prima facie case of iniquity.

1. Appeal allowed. The Employment Judge's order striking out paragraphs 10 and 11 of section 8.2 of the second claim form was set aside.
2. The Employment Judge correctly declined to use the later overheard pub conversation to construe the earlier email. The speaker was unidentified, no contemporaneous note existed, and it would have been unsafe to use that unauthorised conversation to interpret the document.
3. Interpretation of a document is a question of law. Where external facts inform its meaning, the Tribunal's conclusion deserves particular respect. Here, however, the structure and language of the email showed that the Employment Judge's interpretation was erroneous. The email did not merely advise on a genuine, general redundancy exercise or warn of litigation risk. It advised that the wider redundancy process could be used as a cloak to dismiss the claimant because of his continuing disability-related complaints and employment difficulties.
4. Legal advice privilege serves an important public interest, but advice sought or given to effect iniquity is not privileged. A strong prima facie case is required. Iniquity must reach the high threshold of underhand conduct entirely contrary to public policy; each case turns on its facts.
5. Advice which merely warns that selecting a disabled employee for redundancy may generate a claim would not meet that threshold. Nor is every act of discrimination necessarily iniquity. But the advice recorded here was capable of facilitating deception of both the claimant and, if acted upon, an Employment Tribunal in anticipated proceedings. It therefore established a strong prima facie case of iniquity. The Tribunal hearing the substantive claim must decide whether the advice was in fact given to perpetrate or further iniquity.
6. Legal advice privilege could not be claimed for the overheard pub conversation.

• Employment Appeal Tribunal: Allowed the claimant's appeal and set aside the Employment Judge's strike-out order.
• Employment Tribunal: In a closed preliminary hearing, held that the iniquity principle did not displace legal advice privilege and struck out parts of the second claim under Schedule 1 Rule 37(1)(a) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013.