In the recent decision of Trentside Manor Care Limited & Ors v Raphael [2022] EAT 37, the Employment Appeal Tribunal (“EAT”) had to consider the issue of privilege for HR advisers, and in particular, whether the advice provided by external HR consultants was privileged (i.e. legally protected from disclosure). In short, the answer in Trentside is no, but please read on!
The employee was the manager of a residential care home from 2011 until her dismissal on 27 August 2018. The employee had made a flexible working request which, after discussion, was granted on a trial basis from June 2018. Following a subsequent incident at work at the end of June 2018, the employee was suspended and investigated for misconduct, ultimately leading to her dismissal. The employee alleged that the real reason for her dismissal was related to her flexible working request which, in turn, related to disability. The employee brought proceedings in the Employment Tribunal (“ET”) and, as part of the proceedings, sought an order from the ET that correspondence between the employer and its HR advisors, from when the employee made the flexible working request to when the employee was dismissed, be disclosed. The employer claimed that the correspondence was protected by both litigation privilege and legal advice privilege (see explanation below for the distinction on privilege) and was therefore not disclosable. The HR consultants advising the employer were not legally qualified, although had been supervised to some extent by at least one solicitor within the team. The ET ordered that the disclosure of the correspondence should be made to the employee’s solicitors, but not the employee directly – the purpose was to consider the issue of privilege.
The ET also held that the correspondence prior to the employee’s suspension was not privileged. The employer appealed. The EAT found that the order of the ET requiring the employer to disclose various documents was not a proper exercise of the ET’s case management discretion as it was wrong in principle. In doing so, the ET compromised the very privilege that the employer was asserting, before the ET had determined whether the employee was entitled to it or not. Had the initial disclosure order been complied with, it would be likely to have placed the employee’s legal advisers in a position of irreconcilable conflict.
However, the EAT did agree that the advice provided to the employer by non-lawyers was not covered by legal advice privilege. The EAT observed that, if there is a dispute over privilege, the appropriate procedural starting point is for the party asserting privilege to be required to produce a sworn statement explaining on what basis it is asserted and including, with as much specificity as can be provided without compromising the privilege, information about the nature of the documents in issue.
The case is an important reminder for all employers and HR professionals that legal advice privilege will generally only attach to advice and correspondence between a qualified legal professional and their client. However, if there is a reasonable prospect of litigation, litigation privilege might apply. Privilege is far from a simple issue to resolve and it is always advisable to seek legal advice if there is any doubt. The consequences of getting it wrong could be highly detrimental to all concerned.
The difference between legal advice privilege and litigation privilege.
Legal advice privilege protects against the compulsory disclosure of all types of communications made between clients and their lawyers (both external and in-house). This covers situations in which advice is sought or given within a “relevant legal context” and where those communications are made for the dominant purpose of seeking or giving legal advice on the rights and liabilities of the client and what should prudently and sensibly be done in the relevant legal context. The subject matter of the advice sought or given is irrelevant, so long as it is given or sought within a legal context and the dominant purpose test is satisfied. Therefore, legal advice privilege protects advice sought by, or given to, clients in relation to both contentious and non-contentious matters.
Litigation privilege protects any documents or communications between a lawyer and his or her client or between either of them and a third party, created for the dominant purpose of preparing for existing, pending, or reasonably contemplated litigation. The communication must be confidential and not waived by the client. Litigation does not need to be the only purpose for which the document has been created but must be the primary purpose. It also does not need to relate strictly to the provision of legal advice.
Why does this matter?
In situations where an employee has a grievance or is subject to a disciplinary investigation, employers are likely to seek legal advice, even before tribunal proceedings are contemplated. Such advice, as you would expect, will often contain sensitive information that may, if disclosed, prejudice an employer’s case. If an employer receives advice from a HR consultant, although the advice may be first-class, it may not be covered by legal advice privilege. To protect the best interests of an employer, in situations where a matter has even the slightest potential to end up in court, the employer ought to engage a qualified employment lawyer. There are many situations in which employment lawyers and HR consultants can work together and/or have complementary skill sets – it is well worth considering the impact of relying on advice and the employer’s objectives before adopting one or other course. A good lawyer or HR practitioner will, however, welcome the discussion and be able to clarify the options for you to enable you to get the best outcome.
For further information or if you require any employment related advice, please reach out to Katherine Sheerin or Kirsten Porter.
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Cains is able to provide clear, considered and tailored legal advice and administrative support necessary for ensuring that all of your needs are managed and executed in an efficient and timely manner.
The guidance in this note is for information purposes only and is not intended to be exhaustive. It is not intended to constitute legal or other professional advice, and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances. Cains only advises on the laws of the Isle of Man and accepts no responsibility for any errors, omissions or misleading statements or for any loss which may arise from reliance on the information in this note.
