Privilege in an employment context

In recent years our courts have made it significantly harder to claim that a document is privileged from disclosure in legal proceedings. In this briefing we look at some key points for employers to consider in relation to their dealings with employees.

What kind of privilege are you claiming?

When assessing whether a document is privileged, it is important to be clear about the type of privilege being claimed. There are three main types of privilege, which can overlap in practice:

• Legal advice privilege protects communications between a client and lawyer which are created for the purposes of giving or receiving legal advice. Communications from a third party will not be protected, even if created for that purpose. 
• Litigation privilege protects documents that are prepared for the “dominant purpose” of conducting or aiding the conduct of actual litigation or litigation which is “reasonably in prospect”. This type of privilege is not confined to communications between a client and a lawyer. 
• Without prejudice privilege excludes all communications from being given in evidence, where they have been made in a genuine attempt to settle proceedings.

Who is the client?

If legal proceedings have not been issued or threatened, you are probably looking at legal advice privilege. However not everyone in your organisation will be regarded as a client for these purposes – recent cases have made it clear that it is only those “expressly charged” with seeking and receiving legal advice. Ideally therefore this group of employees should be identified at the beginning of any internal investigation or other matter which may lead to litigation later.

For a typical disciplinary or grievance investigation this group of employees can readily be identified, but this can be a problem for more complex investigations which involve a number of different departments.

Who is the lawyer?

When communicating with outside lawyers this is normally straightforward. However the lines can become blurred with dealing with in-house counsel. Unlike in some other European jurisdictions, in-house counsel are regarded as lawyers for these purposes, but only when they are practising as such, rather than providing purely commercial advice to their organisation.

When is the document being created?

It is important to realise that as a general rule the question of whether or not a document is privileged is determined at the time of its creation. That means that a document cannot normally acquire a privileged status merely because it is subsequently communicated to a lawyer, or can be used to defend litigation.

Where proceedings have not been issued, it is therefore important to ensure that any potentially sensitive documents are not created until a lawyer/client relationship has been established in relation to that matter.

Why is the document being created?

In relation to legal advice privilege, a distinction needs to be drawn between purely factual documents (such as statements taken in the course of a grievance investigation) and documents that are generated in order to take legal advice (for example a draft report or letter which will not be disclosed to the claimant until it has been run past a lawyer). Under the current state of the law, the statements will probably not be privileged, but the draft report or letter will be.

In relation to litigation privilege the key issue is likely to be whether the document has been prepared with the “dominant purpose” of conducting litigation. In this context there is likely to be a distinction between “dual purpose” documents (such as witness statements and investigation reports prepared before the litigation commenced) and documents prepared (whether by employees or third parties) in order to defend the litigation. In general, it is best to assume that dual purpose documents will not be privileged.

What is the document going to state?

There are two main things to bear in mind here: 

• If possible, avoid mixing purely factual material which may need to be disclosed in legal proceedings with material that is clearly privileged – eg, a summary of the legal advice that you have received, or a summary of issues prepared in order to seek legal guidance. 
• If something is very sensitive, do you really need to write it down?

To whom is the document being sent?

It is best practice to restrict the circulation of privileged documents. However the whole purpose of privilege would be lost if it was not possible to circulate legal advice to those in the wider organisation who need to know. But once the contents of the advice cease to be confidential, privilege will be lost.

In most circumstances a reasonable compromise is to make sure each privileged document is clearly marked as confidential and privileged and is either circulated in hard copy, or as an attachment to an email. In either case, the recipient should be warned not to forward or copy it to anyone else unless this is essential for the conduct of the matter.

When is litigation “reasonably in prospect”?

The courts have taken a pretty strict view of when litigation is “reasonably in prospect”. In the employment context most disciplinary or grievance proceedings could potentially result in litigation but that on its own is not enough to claim litigation privilege. Something more is required, though it is not always clear where the dividing line is crossed between litigation being possible (not enough) and likely (probably enough).

If an employer believes litigation is likely and wishes to claim litigation privilege from that point, its other actions must be consistent with that position. In particular it should ensure that everyone with access to documents relating to that matter is made aware of their duty to preserve documents that may need to be disclosed in legal proceedings (this process is often referred to as implementing a “litigation hold”). A record of the precise steps taken should be kept.

Conclusion

The key points to remember can be summarised as follows:

• Think about privilege before the document is created: once it has been created, it will normally be too late to change its status. 
• If something is particularly sensitive, don’t write it down at all. 
• Don’t mix up privileged and non-privileged material in the same document. 
• Don’t forget about implementing a “litigation hold” when required. 
• Be careful about how you circulate privileged documents.