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Legal professional privilege and employment law

In R (on the application of Prudential Plc and another) v Special Commissioner of Income Tax and another [2013] UKSC 1 a majority of the Supreme Court held that legal advice privilege does not extend to protect legal advice given by professionals who are not lawyers and that it is for Parliament, not the courts, to decide whether and how the privilege should be extended.

This decision provides an opportunity briefly to review the principles of the law of privilege in the context of employment law.

There are, of course, two types of legal professional privilege, (i) legal advice privilege – which protects communications between a party and their legal advisor made for the purpose of obtaining or giving legal advice, and (ii) litigation privilege – which attaches to communications between a party or their legal advisers and a third party but only if the communication is made for the purpose of either existing or contemplated litigation.

How is legal professional privilege applied in Employment Tribunals?

These common-law principles apply equally in Employment Tribunals. However the common use of advisors without legal qualifications in employment disputes (for example HR consultants or personnel advisers) has raised the question of whether, particularly in a forum which is designed to be more accessible and informal than the civil courts, different rules should apply.

Historically, there has been something of a difference of view. In M&W Grazebrook Ltd v Wallens [1973] IRLR 139 the NIRC (predecessor to the EAT) took the view that the ordinary common-law rules were too restrictive and that privilege should extend to non-legal advisors in relation to communications with an actual view to litigation in hand and the mode of conduct of it.

This limited extension was effectively disposed of in New Victoria Hospital v Ryan [1993] IRLR 202 which held that advice from personnel consultants prior to dismissal was not privileged from discovery as it was not covered by legal professional privilege. The EAT held that legal professional privilege should be strictly confined to legal advisers such as solicitors and counsel who were professionally qualified and subject to the rules and etiquette of their professions and who owed a duty to the court. In any event the EAT held that on inspection, the correspondence in that case did not embody communications on matters which would have attracted legal professional privilege.

New Victoria Hospital has been continuously cited with approval, although it is worthy of note that a more recent EAT decision seeks again to depart from the status quo although in the specific context of litigation privilege – Scotthorne v Four Seasons Conservatories (UK) Ltd (2010) UKEAT/0178/10 (unreported).

This concerned a claim for unfair dismissal by an employee following a workplace altercation, and the EAT held that advice provided to the employer by non-lawyers at its insurance company was protected by litigation privilege and should not be disclosed.

What type of advice is protected by legal professional privilege?

Regardless of which type of privilege is sought, it is important that the Tribunal considers the material carefully: Howes v Hinckley & Bosworth Borough Council [2008] EAT/0213/08. Not every communication between a lawyer and a client will be privileged; for legal advice privilege the communication must be concerned with the giving and receiving of legal advice, and therefore advice which is social, purely commercial or tactical may not be protected.

The recent Prudential decision was concerned with legal advice given by tax accountants. Was that advice privileged and therefore, on the facts, unavailable to HMRC? The argument came down to whether it was appropriate for the courts to intervene in an area heavily regulated by statute. The majority, despite apparently accepting that the principled arguments in favour of extending the privilege were very strong, decided that it was for Parliament to intervene.  One of the matters animating that conclusion was the difficulty in deciding which other professionals’ advice would be covered. In this connection, Lord Neuberger cited the decision in New Victoria Hospital as one example of the general unwillingness of courts and tribunals to extend the principle to protect legal advice given by non-lawyers. Lord Sumption’s powerful dissent is of great interest however. His expression of the test – that the privilege will apply in cases where legal advice is given by a professional person “whose profession ordinarily includes the giving of legal advice” – is clearly apt to cover the HR professional, and may well provide a springboard for the argument to be re-run before the EAT in the near future.

Practical consequences of recent cases

However unless and until a specific exception is developed in the Employment Tribunals the Supreme Court decision in Prudential reaffirms the position in New Victoria Hospital, that is, that legal advice privilege only attaches to communications with a qualified lawyer. The position for litigation privilege is more ambiguous given the decision in Scotthorne. The practical consequences of this are:

  • Employers and employees must understand that correspondence with HR consultants (and other non-qualified advisers) may fall within the scope of documents which are disclosable.
  • In particular, this will be true for legal advice when litigation is remote – for example when advising on a redundancy selection procedure.
  • Simply copying in lawyers to emails is unlikely to allow the party to invoke privilege as the Tribunal will have to look carefully at the purpose of the communications.