The Employment Appeal Tribunal in X v Y Ltd has ruled that an email containing advice from an in-house lawyer was not protected by privilege due to the “iniquity principle”, as there was a strong prima facie case that it advised on how to “cloak” as dismissal for redundancy the claimant’s dismissal resulting from allegations of disability discrimination and victimisation.  Relevant passages in the claimant’s claim should therefore not have been struck out.

It is well established that the iniquity principle prevents the application of legal professional privilege where advice is given for the purpose of facilitating crime or fraud. Fraud for these purposes has been interpreted to include “sharp practice”, or conduct which commercial people would say was a fraud, or which the law treats as entirely contrary to public policy. It would not normally include conduct which merely amounts to a civil wrong, ie a tort, nor does it cover conduct which amounts to a breach of fundamental human rights.

In the present case, an employee who had raised allegations of disability discrimination was made redundant as part of a wider redundancy exercise amongst the legal department.  The EAT found on the facts that the advice in question went beyond pointing out the risk of claims if the claimant were selected for redundancy, and (on a strong prima facie case) was to be interpreted as advising that the genuine redundancy exercise could be used as a cloak to dismiss the claimant to avoid his continuing complaints and difficulties with his employment which he alleged were related to his disability.  As such, the advice was an attempt to deceive both the claimant and, ultimately, an employment tribunal. Continue reading →