Hello and welcome back for another case law update. Last week we looked at disability discrimination and references. This week we going into unfamiliar territory: legal privilege.

X v Y Ltd

Our first case involves legal privilege. In legal proceedings both parties should have a “cards on the table” approach to disclosing documents. No document should be withheld because it portrays the party in a bad light or might hinder their case.

However, documents can be withheld from disclosure if they are subject to legal privilege. Legal privilege applies to communications between legal professional and client where the aim of the communication is to give or obtain legal advice.

The privilege is near-absolute and cannot easily be overridden. One of the few ways the privilege can be overridden is if the iniquity exception applies. This means the advice is used as a means to disguise immorality or acts made in bad faith.

Therefore, the question today is:

Does the iniquity principle apply to legal advice advising a client how to hide an act of discrimination?

X, the Claimant, was employed as a lawyer for Y, the Respondent. The Claimant was disabled for the purposes of Equality Act 2010. The Respondent had concerns about the Claimant’s performance, these performance issues stemmed from his disabilities. As last week’s case taught us, applying a performance policy to a disabled employee can amount to disability discrimination.

The Respondent acquired another business and there was a large-scale restructuring. During the restructuring, the Claimant was placed at risk of redundancy. The Claimant then overheard a conversation between two legal professionals discussing how the Claimant could be managed out of the business via redundancy.

Shortly after this the Claimant was then sent an anonymous email. The email was marked ‘legally privileged and confidential.’ The contents of email showed the Respondent’s legal adviser advising them how, instead of performance management, the Respondent could use the restructuring as a chance to make the Claimant redundant. This would reduce the risk of a disability discrimination claim.

The Claimant initiated a disability discrimination claim and relied on this email in his ET1 (claim form). The Respondent argued the email was subject to legal privilege and the ET agreed. It struck out all references to the leaked email.

The Claimant appealed and the EAT accepted the appeal.  It held the email went beyond advising the Respondent on the risk of a disability discrimination claim and instead advised them how to conceal an act of discrimination. This meant the iniquity principle applied and the privilege was revoked.

The takeaway point:

Traditionally iniquity only applied to cases of criminality, for example were a solicitor advised a client how to launder money or commit fraud. This case shows iniquity will apply to a much broader and arguably lesser range of issues.

This case is also interesting because it might impact how professionals give their advice. One of the key things here was that the advice went beyond advising of a risk and instead advised how to mask discrimination.