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Acts of discrimination could fall under fraud exception to Legal Privilege

BY Daniel Gorry
Employment Law & HR

Legal advice privilege applies to confidential communications which pass between a client and the client’s lawyer and have come into existence for the purpose of giving or receiving legal advice about what should prudently and sensibly be done in the relevant legal context. It is lost where a communication or document comes into being for further a criminal or fraudulent agenda. This is known as the ‘fraud exception’ or ‘iniquity principle’ and is based on public policy.

In the case of X v Y Ltd, X was an inhouse lawyer who suffered from type 2 diabetes and sleep apnoea. He was dismissed on grounds of redundancy in January 2017. This followed a number of requests asking for adjustments to be made to accommodate X’s disability. In raising this claim, he relied on a copy of an email marked ‘Legally Privileged and Confidential’ which was sent by A, a senior lawyer, to B, a lawyer assigned to Y. He argued that the fraud exception applied because the emailed contained advice on how to disguise an act of unlawful victimisation by using a redundancy process to dismiss him.

The Employment Tribunal agreed with Y when it argued that the potential discrimination contained in the email was not akin to fraud. This decision was overturned by the EAT which found that their was a strong case of iniquity and therefore the email was not privileged. It found that the advice in the email was used to attempt to deceive X but also a possible attempt to deceive an employment tribunal in any subsequent legal proceedings.

In this particular case, the employee had been sent a copy of the email anonymously in the post. In the absence of this, he would have been unlikely to have seen the email and therefore would not have been able to rely on it. However, the EAT’s decision that advice involving discrimination might be so unconscionable as to bring it under the fraud exception rule should still be remembered when sending communications which, ultimately, may not remain private.

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