Appeal No. UKEAT/0213/08/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
                                                                                                    On 1 July 2008
	                      Judgment handed down on 4 July 2008

Before
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
(SITTING ALONE)

MRS L HOWES	APPELLANT

HINCKLEY & BOSWORTH BOROUGH COUNCIL	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR SCOTT HALBORG
(Solicitor)
Messrs Halborg & Co
Solicitors
17 Station Road
HINCKLEY
LE10 1AW	
For the Respondent	MS NADIA MOTRAGHI
(of Counsel)
Instructed by:
Hinckley & Bosworth Council Legal Services
Council Offices
Argents Mead
HINCKLEY
Leicestershire
LE10 1BZ

SUMMARY

PRACTICE AND PROCEDURE:  Admissibility of evidence

The claimant sought disclosure of advice given by a qualified solicitor.  The employment judge rejected the claim on the grounds that the advice was protected by both legal advice and litigation privilege.  The claimant appealed arguing that the advice had not been given by the solicitor acting as solicitor, and that as regards litigation privilege, the dominant purpose in obtaining the advice was not any contemplated legal proceedings.   
The EAT held that quite independently of privilege, the advice should not be disclosed because it was not relevant.  In any event the judge had been entitled to find that even if relevant it was protected by legal advice privilege, although on the facts litigation privilege could not be made out.

THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1.	Mrs Howes lodged a claim against the respondent council which included allegations that they had made unlawful deduction from her wages, had failed properly to comply with the statutory grievance procedure, and had subjected her to a detriment for whistle blowing. The alleged detriment was being disciplined and given a written warning.  The council said that the warning had been given because of the tone of certain correspondence with senior management.

2.	The claim relating to under payment of wages alleges a failure to pay an increase which the claimant says she was entitled to receive as from 1 January 2003 as a consequence of a job evaluation study in her favour. She contends that she has never properly received that increase and is therefore owed significant back pay.

3.	The complaint relating to the statutory grievance is that the grievance was not properly addressed and that there was undue delay.  

4.	The grievance was initially considered by in-house lawyers and rejected.  It appears that the claimant cast doubt upon the independence of that advice, and the Council decided to take outside advice. Accordingly the formal resolution of the grievance was expressly adjourned in order for the council to take advice from a Mr Munro. He is qualified as a solicitor and at the time held a practising certificate (although it expired shortly thereafter).  The claimant alleges that she is entitled to see that advice and documents generated in connection with obtaining it. The employer denies that she is so entitled, contending that the advice received was privileged, either on the grounds that it was legal advice obtained from a solicitor, or that it was protected by litigation privilege, given that subsequent legal action was in contemplation, even although it had not been commenced when the advice was sought.

Legal advice privilege and litigation privilege.
5.	These two forms of privilege have different scope and fall within the generic term, legal professional privilege.  Putting it shortly, advice privilege protects confidential communications between a client and his professional legal adviser made for the purpose of giving or seeking legal advice.  It is irrelevant for a claim under this head whether litigation is envisaged or not.  Litigation privilege, by contrast, protects confidential communications between a client, his legal adviser and a third party (such as an expert) where such communication comes into existence for the dominant purpose of being used in connection with actual or contemplated litigation.

The hearing below.
6.	The claimant submitted that the advice given by Mr Munro was not protected by either legal advice or litigation privilege.  As to the former, the advice was given not in Mr Munro’s capacity as a solicitor but rather as an employment consultant. Mr Munro did not appear to comply with any of the rules which regulate the practice of solicitors. The fact that he held a practice certificate at the appropriate time was irrelevant as he was not in fact giving his advice in his capacity as a solicitor. 

7.	As to litigation privilege, it was contended that the litigation was not in contemplation at the time the advice was sought. In any event, it was not the dominant purpose for which the advice was sought since it was obtained principally, if not exclusively, in connection with resolving a grievance. 

8.	Finally, it was said that the employers had indicated that effectively the advice was going to determine how they resolved the grievance. In those circumstances, Mr Munro’s advice was determinative of the dispute over the grievance and essentially equivalent to the decision of an arbitrator or adjudicator. The claimant agreed to the delay in the handling of the grievance on the understanding that this was the basis on which the advice was being obtained.  Accordingly, any privilege which might otherwise have applied had thereby been waived.  The advice was no longer confidential or intended to be.  Furthermore, if it was given qua arbitrator, it was not given by Mr Munro in his capacity as a solicitor.

9.	The respondent submitted that there could be no doubt that legal advice privilege applied: this was legal advice from a solicitor who held a practising certificate at the material time.  The claimant had put forward no evidence that the advice was given by Mr Munro in any  capacity other than that of a solicitor.  She had speculated that he may not be complying with the relevant professional rules and standards, but no more than that.  The council had the burden of proving that the advice was privileged but in the absence of other evidence, they had discharged that burden by producing a current practising certificate.

10.	 In addition, the advice was also covered by litigation privilege anyway since litigation was clearly in contemplation.  There was evidence from the claimant that she had already contacted solicitors when the advice was sought.  

11.	The employment judge upheld both the employer’s submissions. He considered that whether or not Mr Munro was complying with the code of conduct relating to solicitors was irrelevant; a party does not lose privilege because of the solicitor’s failure to comply with his professional standards. The advice was plainly legal advice and therefore the legal advice privilege was engaged. Furthermore, the relevant communications were protected by litigation privilege since proceedings were certainly contemplated at the material time.

12.	The employment judge did not in terms address the question of relevance, but he did 
make the following observation: 
“It seems to me that the only possible reason for Mr Halborg wanting to see this is because he wishes to know what the nature of the legal advice was.”
This would suggest that the judge did not see any relevance in the documentation, although he did not in terms dismiss the application on that basis.

Relevance.
13.	Before addressing the grounds of appeal, I shall consider the issue of relevance. It was originally conceded by the respondent that the documents in issue here are relevant, but that concession was enthusiastically withdrawn before me once I raised the question.

14.	Mr.Halborg, a solicitor representing the claimant, alleged that the advice is material for a number of reasons, all related to the complaint alleging breach of the statutory grievance procedures found in schedule 2 Part 2 of the Employment Act 2002.  It may be material to the delay; it may show whether the reason actually given for rejecting the grievance reflects the advice given; and it may cast light on the whistle blowing claim. 

15.	As Mr Halborg accepted, the question of relevance is closely linked with his argument that Mr Munro was not really giving legal advice at all.  It is alleged that the circumstances in which he was approached made it clear that the council was intent on following his advice, whatever it might be.  In effect, they had delegated the duty of determining the grievance to him.  This is the basis on which the claimant alleges that Mr Munro was in effect acting as an arbitrator or adjudicator.  Since he was acting for the council it was his reasons for rejecting the grievance that had to be provided.  Moreover, by implication the council had waived confidentiality.

16.	In fact none of this is spelt out in the original ET1. The only case there advanced is failure to address the grievance and delay.  But even if the claim had been framed in this way,  I do not see how it would establish the relevance of these documents. The fact of seeking advice may have some relevance to why there was a delay, but the content of that advice would be wholly irrelevant to that question.  

17.	Moreover, when determining whether the statutory grievance has been complied with, the only issue relevant to this case is whether the employer has “informed the employee of his decision as to his grievance”.  Strictly, it does not require the reasons at all.   Here the council have done that.  They have in fact set out in some detail the basis of their rejection.  If it departs from Mr Munro’s advice, that is irrelevant.  If it is in breach of the authority they have given to Mr Munro, that is also irrelevant as far as the claimant is concerned.  

18.	I can see that it might in theory be possible to formulate some legal claim along the lines that there has been an implied agreement that Mr Munro will act as an arbitrator.  But I doubt whether that can be formulated in any way relevant to the jurisdiction of the Tribunal.  In any event, the claimant has never accepted that she will be bound by his decision so not surprisingly the case has never been put like that.  For reasons I further explain below, in these circumstances I do not think it even arguable that Mr Munro can be treated as an arbitrator or adjudicator.

19.	Finally, I do not see how the advice bears upon the question whether the reason for disciplining the claimant was that she had lodged a grievance.  The answer to that question depends upon why disciplinary action was taken by the employers.  The advice has no relevance at all with regard to her substantive complaint about back pay, and it is not suggested that it does.

20.	It follows that I agree with His Honour Judge McMullen QC, who first sifted this matter, that the content of this legal advice has no bearing on any of the issues in dispute.  The advice does not assist the employer if right, nor damn him if wrong. I would dismiss the appeal on this basis alone, notwithstanding that this point was originally conceded. 

21.	The court should, in my judgment, always consider the relevance of any documents with respect to which a party is seeking disclosure, whether the resisting party specifically raises the matter or not. That is the first question that should be addressed in any privilege case. A court should not order disclosure if the documents have no proper bearing on any of the issues in the case.   In my judgment, these documents do not.  

22.	To order disclosure might lead the Employment Tribunal to believe that the documents must be taken to have some significance when they do not.  As I have said, the employment judge in fact appeared to consider that the documents were not relevant, even though he did not determine the case on that basis.

The appeal:  privilege
23.	Strictly it is not necessary to deal with the existing ground of appeal, but since I have heard argument on the point, I will do so.  

24.	There is no doubt that if Mr Munro is giving the advice in his capacity as a solicitor, then the documents are privileged. This much the claimant accepts, although she disputes the finding that they fall under the category of litigation privilege. The contention is that Mr Munro was not acting as a solicitor at the material time, although qualified as one, and he was not contacted in that capacity.

25.	There are two grounds relating to this submission.  First, it is said that Mr Munro was acting as an employment consultant and not a solicitor at all. Reliance is placed upon the fact that Mr Munro was not, so far as the claimant was able to discern from the web, registered with the Law Society in any capacity, i.e. neither as a partner in a firm, nor as a sole practitioner, nor as an employed solicitor. 

26.	Moreover, the claimant contended that there was no evidence before the Tribunal that his practising address had been registered with the Law Society, or that he had issued any letter of engagement, or that his letters stated that he was regulated by the Solicitors Regulation Authority, or that he kept relevant accounts in the manner required by the relevant professional regulations, or had the necessary professional indemnity insurance. The Tribunal considered that whether or not Mr Munro was in breach of these provisions was irrelevant to the question whether he was giving advice as a solicitor.

27.	 By putting the point in this way, I suspect that the Tribunal misunderstood the argument. The contention is not that Mr Munro was in breach of all these provisions and that this would preclude the privilege arising.  I would accept that any such argument would have no prospect of success. A client cannot be prejudiced by the professional failings of his solicitor.  Rather, as I understand it, the submission is that the evidence demonstrates that Mr Munro did not consider himself to be bound by any of these provisions and that was because he was not purporting to act as a solicitor.  He was choosing not to give advice in his capacity as a solicitor at all.

28.	 It is well established that the fact that someone is a solicitor with a practice certificate does not mean that any advice given is automatically protected by legal advice privilege. It must be provided in the context of that professional relationship: see Greenhough v Gaskell [1824-1832] All ER Rep. 767 at 770-771 per Lord Brougham (privilege not applying to attorney giving his advice in his capacity as a friend).

29.	More recently the point was emphasised by Lord Scott in Three Rivers District Council v Governor and Company of the Bank of England [2005] 1 AC  610, para 58:  
“In relation to legal advice privilege what matters today remains the same as what mattered in the past; whether the lawyers are being asked qua lawyers to provide the advice”

Only if the advice is given by someone who is both a lawyer and acting in that capacity will it be protected. 

30.	Moreover, in New Victoria Hospital v Ryan [1993] IRLR 202 the EAT (Mr Justice Tucker presiding) held that the privilege of legal advice did not attach to those who were not legal advisers. The rationale given was that the privilege should apply only to those
“who are professionally qualified, who are members of professional bodies, who are subject to the rules and etiquette of their professions, and who owe a duty to the courts” (para 11). 

31.	The case advanced here is that although Mr Munro was qualified and held a practising certificate, there are grounds for believing that he was choosing not to subject himself to the professional standards by deliberately acting in some other capacity.

32.	I would accept that it would be possible for a qualified lawyer, even one with a practising certificate, to act in some other capacity.  I was referred to the notes to rule 20 of the Solicitors Code of Conduct which says that there is a presumption that someone is practising as a solicitor if he is held out (either expressly or impliedly) as a solicitor and provides lawyer-like services.  This suggests that he will not be acting as a solicitor if he does not hold himself out in that capacity, although a qualified solicitor providing legal advice would, I suspect, readily be found to be impliedly holding himself out as a solicitor.

33.	  The difficulty facing the claimant, in my view, is that there was no clear evidence below about the extent to which Mr Munro failed to comply with the relevant standards, nor was there any positive evidence that he was acting other than a solicitor.   It appears that the employment judge took the view that since he was a qualified solicitor with a practising certificate, and given the nature of the advice sought, that was enough to justify the inference that he was acting as a solicitor when giving that advice.  In my judgment the employment judge was plainly entitled to do that.  The claimant had raised a number of queries about Mr Munro’s status, but in my judgment they did no more than raise a question mark about it.  The council had produced the basic material from which it was reasonable to infer that Mr Munro was being contacted qua solicitor – his qualifications, the context in which the advice was sought, and the practising certificate. The countervailing material did not exist; it was almost exclusively speculation.

34.	Accordingly, I find that the employment judge was entitled to conclude on the evidence that the advice was given by Mr Munro in his capacity as a solicitor.

35.	I reject the alternative ground on which it is said that Mr Munro was giving the advice other than in his capacity as a solicitor. As I have said, it is submitted that since the employers had determined to act on the basis of the advice, Mr Munro should be treated as an adjudicator or alternatively, as an arbitrator. If the advice was given by him in that capacity, then it was disclosable. The basis for this contention was that by implicitly following his advice to the rule, the council was effectively requiring Mr Munro to adjudicate the merits of the grievance. Reliance is also placed on certain observations in the correspondence. For example, in a letter to the claimant a council officer wrote that:
“I feel the best way to proceed will be for the Council to obtain independent legal advice in order to provide information to assist in determining your grievance.”

36.	I do not accept that this, or other correspondence drawn to my attention, demonstrates that the council was undertaking to adopt the advice come what may.  But even if they did, I would reject this argument. The claimant never agreed that the matter should go to arbitration or adjudication, and Mr Munro was not asked to adopt that role. The fact that the council may have had complete confidence in the advice does not affect Mr Munro’s status in any way. Even if they were determined to follow his advice come what may, it does not begin to constitute a basis for waiving privilege nor does it constitute grounds for treating the status of Mr Munro as having been transmuted into that of an arbitrator or adjudicator. 

37.	On the claimant’s analysis, any employer who was in dispute with his employee and said “Get advice from our solicitor and we will do what he says” would have to make that advice available (subject to relevance); whereas if he simply said “Get advice from our solicitor and we will assess what to do in the light of his advice” then he would not. I see no logic or justice in that distinction.

38.	The alternative ground for refusing disclosure was that litigation privilege arose. The difference between this principle and legal advice privilege is that it is capable of extending beyond advice given by qualified lawyers, and will embrace communications with third parties, and documents prepared by third parties, when they are made in contemplation of legal proceedings.  

39.	An example in the employment field is provided by Grazebrook v Wallens [1973] IRLR 139. Sir John Donaldson, giving the judgment of the National Industrial Relations Court, held that litigation privilege would extend to agents other than lawyers who were giving advice with an actual view to the litigation in hand. (In the New Victoria Hospital case it was suggested that this decision may be wrong.  But the EAT there seems to have treated Grazebrook as a case on legal advice privilege whereas in fact it was about litigation privilege. I see no reason why it should not be followed in that context. In my judgment, there is no conflict between the cases.)

40.	I accept the assertion of Ms Motraghi, counsel for the council, that there was evidence to sustain the judge’s conclusion that litigation was in contemplation.  However, that is not enough to attract the privilege.  It is crucial that the dominant purpose for which the advice is sought is the litigation.  The point was succinctly stated in the following terms by Lord Wilberforce in Waugh v British Railways Board [1980] AC 521 at 533:
“It appears to me that unless the purpose of submission to the legal adviser in view of litigation is at least the dominant purpose for which the relevant document is prepared, the reasons which require privilege to be extended to it cannot apply”.

41.	The employment judge simply did not ask himself this question, as he was required to do. If this were otherwise a live issue, it would be usual to refer such a question back to the Tribunal.  However, I do not think that on the facts adduced before the Tribunal it could be said that the dominant purpose of obtaining the advice was preparation for contemplated litigation. The evidence shows that a significant, and indeed the immediate, purpose of obtaining the advice was to attempt to resolve the particular grievance. Depending upon the nature of the advice, it may have had that effect. 

42.	I do not see how it can be said that in these circumstances litigation was the dominant purpose. In this connection I think an analogy can be drawn with the decision of the Court of Appeal in Lask v Gloucester Health Authority [1991] 2 Med LR 379 in which an accident report form was obtained by the defendant health authority and the plaintiff claimed that it was disclosable.  A circular issued by the NHS stated that the report form of this kind was to serve the double function both of dealing with any subsequent complaint that might arise, and also with any legal proceedings which might be brought.  In those circumstances the Court of Appeal held that it was impossible to say that the contemplated litigation was the dominant purpose, and therefore the documents were held not to be privileged.  In my judgment, that is essentially the position here.  

Waiver. 
43.	The final ground of appeal is waiver.  This does not appear to have surfaced in a significant way below, and the judge did not specifically deal with it.   It is said that the council has chosen to indicate to the claimant the gist of the advice and that is enough to waive privilege.  The claimant had been sent a letter prior to the advice of Mr Munro being obtained, based on advice from the in-house lawyer, explaining the reasons for rejecting the grievance. A later letter sent after the advice had been obtained from Mr Munro said: 
	“The independent legal advice supports the original view….”
(There was also a later letter identifying the gist of the legal advice, but that did not make it clear whether this was the in-house or external advice, or both.)

44.  The claimant submits that even if the documents were otherwise privileged - as I have found that they are - that privilege has been lost even although there was no conscious intention to waive privilege. There has been sufficient disclosure of the contents of the advice for confidentiality to be lost.  The claimant relies upon the decision of the Court of Appeal in Great Atlantic Insurance v Home Insurance Company [1981] 1 WLR 529 in which counsel read out at trial a short extract from a memorandum, and it was held that privilege had been waived with respect to the whole document. It is submitted that in a similar way the council, whilst not identifying parts of the document itself, has summarised its effect and this should achieve the same result.

45.	The Council contend that this limited reference is by no means sufficient to amount to a waiver, for two reasons in particular. First, the waiver did not apply in the context of putting evidence before the court. If it had, that might in principle and in an appropriate case justify a finding of waiver on the principle of fairness; it would be unfair to allow a party to rely in court on the advice and yet not produce it.  But outside the court context, there was only waiver if the effect of the limited reference was to waive confidentiality in the document. (See Phipson on Evidence para26-54). Second and in any event, it is submitted that even had this information been given within the context of putting evidence before the court, it would still not have been sufficient to constitute a waiver.  Reliance was placed on the decision of the Court of Appeal in Bourns Inc v Raychem Corporation [1999] FSR 641 and in particular a passage from the judgment of Aldous LJ in which he said (p.676):
“Mere reference to a document [in a witness statement] does not waive privilege in that document: there must at least be reference to the contents and reliance.”

46.    I agree with the council that the limited and oblique reference to the content of the advice does not amount to a waiver.  It was not, in my view, sufficient to lose confidentiality in the advice, and it is not a case where reliance is being placed on it in legal proceedings so as to render it unfair for the privilege to be maintained.  I would reserve the position as to whether the privilege would have been waived if the communication had been made in the context of the court proceedings themselves.  The council’s contentions are persuasive, but this issue of waiver was the subject of written submissions from the parties, and I am conscious that the claimant has not had a full opportunity to deal with the arguments raised.  

Disposal.
47.     I dismiss this appeal on the short ground that the documents sought are not relevant to the litigation.  In addition, in my view the employment judge was entitled to conclude that the advice was protected under the umbrella of legal advice privilege, and that had not in the circumstances been waived.  I do not consider that it would be protected by litigation privilege and would uphold that ground of the appeal. However, that conclusion does not affect the order made below, namely that the advice of Mr Munro need not be disclosed.