The claimant alleged unfair dismissal, claiming that his employer had been trying to remove him from the company for some time before an altercation which led to his dismissal for gross misconduct. This altercation persuaded the respondent to consult RBS Mentor, its non-legal advisors, before deciding what action to take, as required by its policy cover. The correspondence and advice given to the respondent in connection with the dismissal were, according to the claimant, relevant to the claim and as such, the respondent was under a duty to disclose those files to the claimant. The Tribunal, although admitting they were relevant to the proceedings, refused to order disclosure, saying that the documents were protected by legal advice privilege, but not litigation privilege insofar as the documents that pre-dated the disciplinary proceedings that led to the claimant’s dismissal were concerned.

The EAT judge, who actually saw the documents at the respondent’s request, had to decide whether the EJ was correct on the relevance of the documents and also whether the EJ had decided on the correct form of privilege. He said that the starting point would be whether the documents were relevant, and, if they were, whether they were necessary. The respondent argued, and the judge agreed, that matters started at the point of the altercation and the claimant could produce no evidence that they had started before then. Thus any documentation relating to matters before the date of dismissal were irrelevant and therefore unnecessary. The judge then turned to the question of whether legal advice privilege or litigation privilege applied. He ruled that, since all but one of the staff at RBS Mentor were not qualified lawyers, a claim of legal advice privilege would be ‘fraught with difficulty’. However, he did rule that the documents should not be disclosed because litigation privilege did apply, saying

'There is no doubt that from [the date of the altercation], but not before, litigation was the dominant purpose of the approach by the Respondent to RBS Mentor and its advice.'

and

‘It would not surprise me that advice was taken at that stage for the dominant purpose of avoiding litigation or about how to handle matters which could well lead to litigation.’

___________________________________

Appeal No. UKEAT/0178/10/ZT

EMPLOYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 14 May 2010

Before

HIS HONOUR JUDGE McMULLEN QC (SITTING ALONE)

MR S SCOTTHORNE (APPELLANT)

FOUR SEASONS CONSERVATORIES (UK) LTD (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant
MS KAREN MOSS (of Counsel)

Instructed by:
Messrs Lupton Fawcett LLP
35 Townhead Street
Sheffield
S1 2EB

For the Respondent
MR RICHARD SEABROOK (of Counsel)

Instructed by:
Messrs Foys Solicitors
102 Bridge Street
Worksop
S80 1HZ

**SUMMARY**

PRACTICE AND PROCEDURE - Disclosure

After an altercation with an employee, the employer consulted its insurer before deciding what action to take, as required by its policy cover. In the context of the 2002 Employment Act regime, the correspondence and the advice given were capable of attracting litigation privilege. On the EAT, but not the Claimant, seeing the material, the claim to litigation privilege was upheld, covering an insurance policy and advice given by a solicitor and non-lawyers.

**HIS HONOUR JUDGE McMULLEN QC**

1. This case is about disclosure and inspection of material said to be legally privileged. I will refer to the parties as the Claimant and the Respondent.

**Introduction**

1. It is an appeal by the Claimant in those proceedings against an order of Employment Judge Shore made at a telephone CMD on 28 January 2010 in Sheffield. The parties were represented by solicitors. Today Ms Karen Moss appears for the Claimant, Mr Richard Seabrook for the Respondent.

1. The Claimant was dismissed on 6 May 2009. The claim was unfair dismissal, the reason given by the Respondent was gross misconduct. The claim form says:

"The Claimant asserts that [Mr Foulger] had been trying to find ways of removing him from the Respondent Company for some time prior to his dismissal for financial reasons and has concocted the issues surrounding this case as a means for his dismissal."

1. "Some time prior to the dismissal" might predate the dismissal, 6 May 2009 alone or predate 21 April 2009. That is a watershed in the relationship on the Respondent's case because on that date was a confrontation leading to the allegation of gross misconduct, which was put at a sequence of meetings neutrally described as investigative, but ultimately disciplinary, running to the dismissal on 6 May 2009.

1. The application was for disclosure and inspection of material:

"… it is part of the Claimant's claim that Mr Foulger … has been trying to find ways of removing him from the company for some time prior to his dismissal for Mr Foulger's own financial gain.

We believe that the Respondent may be in possession of documents to support the above argument in the form of advice sought by the Respondent from its non legal advisers, Mentor. It is our view that all documents and files held by NatWest Mentor in connection with the dismissal of the Claimant or any prior attempts to dismiss the Claimant are relevant to the Claimant's claim and as such the Respondent is under a duty to disclose these files and documents to the Claimant and provide copies of the same."

1. The application was refused by the Judge in the following terms:

"The documents … are relevant to the proceedings as the Claimant is alleging that the Respondent dismissed him after a protracted period during which the Respondent was seeking to dispense with the Claimant's services. The documents, however, are protected by legal advice privilege, but not litigation privilege insofar [as] the documents that pre date the disciplinary proceedings that led to the Claimant's dismissal are concerned. Accordingly, the Tribunal will not order disclosure of these documents."

1. Live before me is an issue as to whether the Judge was right on the relevance of the documents for it is raised in a Respondent's Answer. There is also an issue as to whether the documents were subject to legal advice privilege and/or litigation privilege. The litigation privilege is indicated to start with the disciplinary proceedings which led to the dismissal.

1. The disciplinary proceedings could be said to begin either on 21 April with the confrontation, or on 22 April 2009 when a meeting took place between Mr Foulger, the leading light of the Respondent, and the Claimant, or from the dismissal at a hearing on 6 May 2009. There was an appeal hearing on 6 July 2009. I will treat as live before me, therefore, issues as to privilege in the forms of legal advice and litigation.

**Procedure**

1. The course which has been taken by the Respondent is to provide a file of documents said to be relevant to the request. It is for my eyes only. This is a rather uncomfortable procedure but recognised as apt for judges not conducting a trial but required to decide issues of disclosure anApd inspection: see by analogy CPR31.19 and the inherent jurisdiction. Mr Seabrook said that it is correct in the EAT, following New Victoria Hospital v Ryan [1993] IRLR 202 EAT, Tucker J and members from which it appears that the EAT Judge alone had access to disputed materials. Ms Moss's stance is neutral. Faced with an unopposed application that I should read the material I did so, expressly reserving my decision until I had heard argument on the substance.

**Discussion**

1. The material is an important corrective to some of the submissions which have been made to me. For I am now in a better position than the Judge to know whether the documents are relevant. That is not the correct test; it is whether they are necessary, although the starting point is relevance (see the Judgment of the Court of Appeal approving my own Judgment in CIBC v Beck.

1. The Judge held, without seeing the papers, that they were relevant. The central allegation in this case as submitted today is of conspiracy and concoction of the reason for dismissal. The reason for dismissal under Section 98(1) and (2) Employment Rights Act 1996 is asserted by the Respondent and to be proved by it. It is gross misconduct arising out of the altercation on 21 April 2009. If it fails to prove that that was the reason it will lose the case but otherwise fairness is determined without a burden of proof.

1. The Respondent's evidence will show, I am told, that events started on that date and that was the real reason. Thus, an allegation as to a concoction of a reason from matters predating it is not relevant or necessary for the disposal of this case except by the bare assertion of the Claimant. More is required. I bear in mind that we are at a stage where evidence has not been exchanged.

1. It is necessary for the Claimant to put his claim forward as to a pre-existing animus to remove him in order that Mr Foulger could make money out of it. The highest it is put is that in a meeting on 24 April 2009, in the course of the disciplinary proceedings, an allegation was made that in 2008 another employee called Barry was put up to make a grievance against the Claimant. Apart from that, the relationship with the rest of the staff was fine.

1. If it were alleged by the Claimant that the above was evidence of a decision to engineer his dismissal at some stage in 2008, it should have been put into the claim. So, on the basis of deciding what is necessary for the trial I hold that material prior to 21 April 2009 is neither relevant nor necessary.

1. The application to the Employment Tribunal is on analysis a combination of disclosure and inspection under rule 10(2)(d), but the two are distinct. The Respondent has disclosed some documents, that is it has told the Claimant it has them, but resists his inspection of them. It has also provided to me other material of which it resists all disclosure. I then look at the material. Provided to me is the full policy with RBS Mentor, its adviser and insurer. The relationship is explained in the witness evidence of the solicitors. The gist is this: a responsible employer with a workforce is often sensibly advised to take out a line of advice and insurance with a creditable organisation such as RBS Mentor. Steps which may lead to Employment Tribunal proceedings should be taken only after advice from RBS Mentor and its being followed by the Respondent. If so, the Respondent is entitled to rely on the insurer for the further conduct of the case.

1. The regime set up by the repealed Employment Act 2002 Regulations (2004), was that disciplinary steps must be taken in a formalistic way. There are consequences should a dismissal occur without the precursor of the steps. The policy of the legislation was to avoid litigation. What has happened since the Regulations came into effect is a major shift in awareness, by those engaged in employment relations, of the importance of internal procedures because of the consequences in an Employment Tribunal.

1. Those who are seeking to take steps against an employee for misconduct in practice had to follow the statutory procedure on pain of substantial financial consequences should the case go to an Employment Tribunal. Similarly, there were consequences for the employee who did not take the steps by not turning up to relevant meetings. If you take the steps you ought to avoid litigation because it is in the interests of the parties to resolve their problems at the workplace.

1. So, looking at it in the abstract, when Mr Kite says that the first instruction given by the Respondent in relation to issues concerning the Claimant was on 21 April 2010, I can understand why. There was on the Respondent's case a major altercation. The notes of the formal disciplinary meeting indicated the nature of it. It is agreed by the Claimant that if someone calls you stupid or an idiot it would not be acceptable and that there was an allegation that there was toe to toe confrontation in Mr Foulger's face, the Claimant was full of contempt and Mr Foulger found it threatening. On Mr Kite's witness statement at the EAT, that was when there was consultation with RBS Mentor.

1. At that stage it could be said that there was legal litigation privilege. Any earlier stage attracting legal advice privilege is fraught with difficulty in the light of the Respondent's concession that some of the RBS Mentor team are not qualified lawyers. There is a qualified lawyer, Mr Carson, and any advice given by him is protected by legal advice privilege. The real issue in this case is litigation privilege. I would be inclined to consider that, in the light of what was believed by the Respondent to have gone on on 21 April 2009, the purpose of consulting RBS Mentor was litigation. In the context of the 2004 Regulations, steps which might lead to dismissal and litigation were being considered.

1. The description of the confrontation from the notes of the hearing indicates gross misconduct. It would not surprise me that there was then a decision to consult RBS Mentor about what to do about this. The natural response of an employer faced with gross misconduct would be dismissal carrying the risk of litigation. Of course, the prior stages set by the 2002 Act would involve disciplinary hearings. The regulations disappeared on 6 April 2009, a few days before these events, although they were some transitional arrangements. Nevertheless, the positive effect they have had on disciplinary procedures remains, which is that parties should try and resolve their problems without going to a Tribunal but there are consequences if you do not follow ACAS recommended steps, broadly speaking the same as the 2002 Act regime. It would not surprise me that advice was taken at that stage for the dominant purpose of avoiding litigation or about how to handle matters which could well lead to litigation.

1. I can form that view on the arguments and upon the evidence which is in open court and that is what I do. However, Elias P reminded us in Howes v Hinckley & Bosworth Borough Council [2008] EAT/0213/08, it is necessary to consider the material. I have. There is no doubt that from 21 April 2009 but not before litigation was the dominant purpose of the approach by the Respondent to RBS Mentor and its advice. On that basis I can assure the Claimant that the litigation privilege argument is correct. The advice given by RBS Mentor to its insured would correspond to it both seeking to avoid litigation and assisting the Respondent should litigation occur. In that case it does not matter that some of those giving advice were not legally qualified. It was given for the dominant purpose of litigation which could well ensue in the light of what the Respondent told RBS Mentor about the altercation with the Claimant.

1. So, for slightly different reasons from those given by the Judge (litigation not legal advice privilege) I uphold his order. I am aware that interference with a Case Management Decision by a Judge on a matter of discretion is going to be rare (see Chief Constable of Lincolnshire Police v Caston. While respectfully differing with the very short reasons given in a telephone CMD, because I have had far more material than he has, I come to the same conclusion. The appeal is dismissed.