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Legal advice privilege and “cloaking” discrimination in a redundancy dismissal

By October 24, 2019June 28th, 2021Employment for Business, For Business

Certain confidential communications attract what we call “privilege” which means they do not have to be disclosed to any third party or the court. Legal advice privilege applies to confidential communications:

  • which pass between a client and their lawyer.
  • which have come in to existence for the purpose of giving or receiving legal advice.

These types of communications are privileged unless the client waives privilege (commonly by disclosing the communication) or it is lost. In the recent case of Curless v Shell International Limited the Court of Appeal had to decide if legal advice privilege had been lost on the basis the advice given had been essentially fraudulent, in this case a sham redundancy hiding a discriminatory dismissal.

Case facts

Mr Curless was employed as a Senior Legal Counsel by Shell. He suffered from type 2 diabetes and sleep apnoea. He commenced employment in 1990 and was dismissed on redundancy grounds in 2017. Shell had raised concerns regarding his performance for a number of years and in 2015 Mr Curless issued tribunal proceedings for disability discrimination and failure to make reasonable adjustments. He subsequently raised a grievance in January 2016 and received a response in June 2016. In April 2016 Shell announced a redundancy programme and Mr Curless was ultimately dismissed on redundancy grounds in January 2017. 

Mr Curless issued proceedings in the Employment Tribunal for disability discrimination, victimisation and unfair dismissal. In bringing the claims he relied on an email that had been sent by one of Shell’s senior lawyers to another lawyer within the organisation in April 2016. The email was marked “Legally Privileged and Confidential” and referred to Shell’s plan to reduce the number of in-house lawyers. The email went on to specifically mention Mr Curless and the fact that the redundancy process would be the “best opportunity” to resolve the situation with him and that, whilst there would be the risk of him arguing unfairness/discrimination, there was a “wider reorganisation and process at play” that they could set the dismissal in to the context of. Mr Curless argued that the email gave advice on how to unlawfully victimise him by using the redundancy program as a cloak for dismissing him and therefore it had lost its privileged status.

Decision of the Employment Tribunal and Employment Appeal Tribunal (“EAT”)

The Employment Tribunal had to determine whether Mr Curless could rely on the email or if it attracted legal advice privilege. The Tribunal confirmed that the email was subject to privilege on the basis it was giving advice on how to handle the redundancy process and that it was not trying to evade legal action but rather to avoid it which was a standard piece of advice from lawyers.

Mr Curless appealed to the EAT and they upheld his appeal. The EAT did not agree with the Tribunal’s interpretation of the email and in its view the email was advising Shell on how it could use the genuine redundancy exercise as a cloak to dismiss Mr Curless thereby avoid his continuing complaints and difficulties with his employment which he said related to his disability. With this in mind the advice was “iniquitous”, because it advised on how to take an unlawful course of action. This meant the email did not attract legal advice privilege and as such Mr Curless could rely on it.

Court of Appeal’s decision

Shell appealed the EAT’s decision to the Court of Appeal and the judgment was handed down on 23rd October 2019. The Court of Appeal agreed with the Tribunal’s interpretation of the email that it was simply advice on how Shell could either offer Mr Curless voluntary severance or made him redundant as part of its reorganisation plans. They did not accept that it was advice to act in an underhand or fraudulent way and therefore the email retained the protection of legal advice privilege.

What does this mean for employers

This case is reassuring for employers as it confirms that any advice they receive from their lawyers on how to deal with tricky employees will be privileged and as such not be discloseable in any subsequent tribunal proceedings. It also makes clear that the threshold for waiving or losing lawyer-client privilege is high and is only going to apply in limited circumstances.

It is also important to remember that legal advice privilege only applies to lawyers and as such does not extend to pure HR consultants. As such if you are engaging the services of a HR consultancy that does not satisfy the relevant solicitors’ regulatory requirements, any advice you receive will not be privileged and as such would have to be disclosed as part of any subsequent litigation which could prove to be extremely damaging.

Russell Brown

Author Russell Brown

Russell is a Partner and Head of Glaisyers' Employment Team.

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