UNIVERSITYOF SOUTHAMPTON v DR C K KELLY [2005] UKEAT 0574_05_1411

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2005] UKEAT 0574_05_1411

Case No Appeal No. UKEAT/0574/05

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

UNIVERSITYOF SOUTHAMPTONAPPELLANT

DR C K KELLYRESPONDENT

Before

His Honour Judge Richardson

Date 14 November 2005

[1]APPEARANCES For the Appellant MR N J CHRONIAS (Solicitor) Messrs Beachcroft Wansbroughs Solicitors 100 Fetter Lane London EC4A 1BN For the Respondent MR K POTTER (Solicitor) Messrs Stevens & Bolton LLP The Billings Guildford Surrey GU1 4YD SUMMARY Practice & Procedure: Disclosure The Tribunal erred in law in making an order for disclosure of documents which were privileged. The Appellant had not waived privilege in the documents sought. HIS HONOUR JUDGE RICHARDSON This is an appeal against an order of the Employment Tribunal sitting in Southampton, dated 2 September 2005 requiring the University of Southampton to disclose certain documents to Dr Colleen Kelly, the Claimant. The University says the documents are subject to legal professional privilege. The Background

[2]By a contract dated 31 January 2001, Dr Kelly was employed by the University as a lecturer in the School of Biological Sciences. She was, and is, a United States citizen. Her contract was expressed to be for a fixed term expiring on 31 December 2005 because she had a work permit lasting until January 2006. Although Dr Kelly's work permit lasted until July 2006, her passport was stamped by the UK Immigration Authorities with a visa expressed to expire on 8 January 2005. The reasons for this are not agreed. Dr Kelly's case, in part, is that it was an administrative mistake and that it was always intended to grant her a visa expiring in January 2006. There are other possible explanations for the visa.

[3]By the beginning of January 2005 this problem had not been resolved. It is Dr Kelly's case that she alerted the University to the problem in December 2004. It is the University's case that it only became aware of the problem in January 2005. The University wrote a letter to the Immigration Authorities to help Dr Kelly. Initially, the University suspended her without pay, giving her until 13 February to resolve the matter.

[4]Later in January, however, the stance of the University changed. The reasons for the change of stance are the subject of dispute between the parties. On 26 January 2005, the University's head of personnel, Julie Wheeler, wrote an internal e-mail to colleagues as follows:

"Following our conversation yesterday, I decided to bite the bullet and suggested to Tony that I thought we should try and move this forward and get legal backing to terminate the contract with effect from 8 January when her visa expired. As a result of this, we contacted our legal services department who back up that we should do that and I have an e-mail to fall back on if this backfires!. So I will liaise with Rachel to get a letter raised to write to her tomorrow and send it recorded delivery. You will of course get a copy. I have no doubt that repercussions will follow, but I feel assured that what we are doing is right and that the original guidance to offer a period of grace was being over cautious and over generous based on the fact that we are actually acting illegally and as such she should not even be in the country let alone on our books in a paid or unpaid capacity."

[5]On 27 January, Rachel Tribe, the personnel officer referred to in that e-mail, wrote to Dr Kelly as follows:

"Further to my letter of 13 January and subsequent advice received from the University's Legal Services Department it is my duty to now inform you that your appointment as Senior Lecturer within the School of Biological Sciences has been terminated with effect from 9 January 2005 when you ceased to have the right to work in the UK. Your last date of paid employment was therefore 8 January 2005"

. Later, she said "I appreciate that my letter of 13 January 2005 stated you would have until 4 February to be granted indefinite leave to remain/further leave to remain but I have since received further advice from University's Legal Services Department". Subsequently, on 2 February 2005, she wrote to Dr Kelly as follows: "Our file has been reviewed by Legal Services at the University who have advised us that the University would be committing a criminal offence by continuing to employ you given that your leave to remain expired on 8 January 2005 and no application to extend that leave was made until after that date. That is the reason why the University considered that it had to act as it did".

[6]On 7 February, Dr Kelly was given indefinite leave to remain, but the University would not reinstate her, saying that her duties had been reassigned and her position was not to be re-advertised. Correspondence ensued between the University and the AUT, the higher education union. In a letter dated 11 March 2005, Barbara Halliday, the University's head of legal services, wrote as follows to the AUT:

"I was first consulted on 26 January 2005. As you know it is basically a criminal offence to employ a person who is not legally entitled to work in the United Kingdom. Against that background, I advised having the right to remain in the United Kingdom as well as the right to work were conditions precedent to Dr Kelly's employment at the University and by operation of law, because one of the conditions precedent was not fulfilled, the employment fell away. There is no termination, there is just no employment"

. The Tribunal Proceedings

[7]On 4 April 2005, Dr Kelly presented a claim to the Tribunal, alleging breach of contract and unfair dismissal. On 11 May 2005, the University served its response. The response sought to explain the University's initial stance, that is to say giving Dr Kelly four weeks to resolve the matter by saying that its personnel officer, Ms Tribe, was not a lawyer and did not seek legal advice until towards the end of January 2005. Paragraph 20 of the response reads: "Having taken legal advice Ms Tribe realised that it would be unlawful to continue to employ the Claimant when she neither had the right to remain or work in the United Kingdom. Accordingly, Ms Tribe wrote to the Claimant informing her that he employment ended when her leave to remain expired so that her last day of paid employment was 8 January 2005".

[8]The response went on in subsequent paragraphs to raise the following principal defences. Firstly, it was denied that Dr Kelly was dismissed. It was said that her contract of employment terminated by operation of law on 8 January 2005. Secondly, in the alternative, it was said that if she was dismissed, she was dismissed for one of two potentially fair reasons. Either she was dismissed because she could not continue to work in her role without contravening a duty or restriction imposed by or under an enactment, (i.e. Section 98(2)(d) of the Employment Rights Act 1996 ) or she was employed for some other substantial reason, namely the genuine belief of the University that her employment had terminated by operation of law or because it would commit a criminal offence by continuing to employ her.

[9]At a case management discussion on 15 June 2005, directions were given which included an order for disclosure of documents. It is important to note in this case, that the process of disclosure of documents has been taking place but subsequent exchange of witness statements has not yet occurred. The Application for Disclosure

[10]On 8 August 2005, Dr Kelly's solicitors wrote to the Tribunal seeking an order under Rule 10(2)(d) of the Employment Tribunal Rules of Procedure 2004 "….that the Respondent should disclose within 7 days copies of communications between Ms Tribe or others in the Respondent's Personnel Department and Mrs Halliday or such other legal adviser as may have provided the advice referred to by the Respondent in paragraph 20 of its Grounds of Resistance which led to Ms Tribe's writing as she did to the Claimant on 27 January and 2 February 2005". The University's solicitors resisted the application claiming legal professional privilege for any such communications. They said that they were communications between in-house legal adviser and client, were of a confidential nature and were created for the purpose of obtaining legal advice. Correspondence ensued between the two firms of solicitors and the Tribunal, Dr Kelly's solicitors' arguments being contained in the letters to the Tribunal dated 8 August and 18 August 2005 for the most part.

[11]On 2 September, the Tribunal issued the order under appeal. It was an

[12]It is convenient immediately to mention two unsatisfactory features of the order. Firstly, it refers to such documents are in the Claimant's possession or power. That is clearly a mistake. No doubt the reference is intended to be to such documents as are in the Respondent's possession or power. Secondly, the letter which specifies the category of documents required is not the letter dated 18 August 2005. It is an earlier letter dated 8 August 2005.

[13]Any order of the Tribunal should be drafted correctly, but is of particular importance that an order for disclosure under the 2004 Rules should be correctly drafted; for failure to comply with an order without reasonable excuse is a criminal offence pursuant to Section 7(4) of the Employment Tribunals Act 1996 . Nevertheless, the form of order in this case is not a ground of an appeal. I make the comments concerning the order simply to emphasise that if this order were to stand, it would be unsatisfactory in its present form. Orders Without a Hearing and Reasons

[14]Even though the application which the Tribunal Chairman was determining was of obvious importance to the difficulty to the parties, neither party asked for a hearing. The Chairman was within his rights to determine the matter without a hearing (see Rule 10(1)). No reasons, oral or written, have ever been given for the order. Regulation 30 of the Employment Tribunal Rules of Procedure 2004 deals with the giving of reasons and does not contain any express duty on the Tribunal to give reasons for a decision made without a hearing or any express right for a disappointed party to request reasons in such circumstances. Underlying paragraph 30 of the Rules is, in my judgment, an expectation that orders which are important and controversial would generally be made at a hearing where the Chairman can be asked for oral reasons although I would expect a Chairman, if he has dealt with an important and controversial matter to give reasons or raise the question of reasons without being asked.

[15]On behalf of the University, Mr Chronias has submitted that there was a legal duty upon the Tribunal Chairman to give reasons. He says that the giving of reasons as to why a Court or Tribunal has determined an issue is a duty to which the duty is subject by virtue of

Article 6 of the European Convention on Human Rights

and Freedoms. I am prepared to assume without deciding that in a case where there was no hearing below and no reasons of any kind had been given, if the order resolved the substantial matter of controversy, the aggrieved party is entitled to request the Tribunal below to give reasons, if not by directly seeking them then by applying for a hearing pursuant to Rule 11. I am further prepared to assume that the Appeal Tribunal is entitled to request reasons for an order made by the Tribunal in relation to such a matter pursuant to Rule 30(3)(b) and that it will be the duty of a Tribunal to give reasons.

[16]In the end, however, I do not need to decide these questions for two reasons. Firstly, the University never clearly or distinctly applied for reasons or for a hearing either before or after the order was made. I do not consider that Article 6 or any principle of fairness is engaged in such circumstances. Secondly, on the particular questions which arise in this appeal, I do not believe that it is necessary in the interests of justice to adjourn in order to obtain the Tribunal's reasons pursuant to Rule 30(3)(b). The question in this appeal is whether the categories of document for which Dr Kelly applied were covered by legal professional privilege and whether legal professional privilege was waived. In this case, the questions are substantially questions of law and questions of fact and discretion were not, to any significant degree, raised below. Legal Professional Privilege

[17]The first point which has been argued by Mr Potter on behalf of Dr Kelly is whether, in principle, the University is entitled to claim privilege in the relevant category of documents. Communications between a party and his professional legal advisers are privileged from production provided that they are confidential and written by or to the professional legal adviser in his professional capacity and for the purpose of getting legal advice and assistance. This form of privilege is known as legal advice privilege to distinguish it from litigation privilege in respect of which different considerations may apply.

[18]In Three Rivers District Council v Bank of England No 6

[2005] 1 AC 610

at paragraphs 30-34 in a speech with which all their Lordships agreed, Lord Scott of Foscote gathered together judicial dicta setting out the policy justification for legal advice privilege. He concluded:

"The dicta to which I have referred all have in common the idea that it is necessary in our society, a society in which the restraining and controlling framework is built upon a belief in the rule of law, that communications between clients and lawyers whereby the clients are hoping for the assistance of the lawyers' legal skills in the management of their, the client's, affairs should be secure against the possibility of any scrutiny from others, whether the police, the executive, business competitors, inquisitive busy-bodies or anyone else. I, for my part, subscribe to this idea. It justifies, in my opinion, the retention of legal advice privilege in our law, notwithstanding that as a result, cases may sometimes have to be decided in ignorance of relevant probative material"

. Lord Scott went on to consider the scope of legal advice privilege and approved the dictum of Taylor LJ in Balabel v Air India

[1988] Ch. 317

at 330 that for the purposes of attracting legal advice privilege: "Legal advice is not confined to telling the client the law. It must include advice as to what should prudently and sensibly be done in the relevant legal context".

[19]On behalf of Dr Kelly, Mr Potter submits that, viewed objectively, the documents which he seeks to obtain are not covered by legal professional privilege. He refers to Three Rivers District Council v Bank of England at paragraphs 38 per Lord Scott and 58 per Lord Rodgers and 111 per Lord Carswell. He says that this case does not involve a normal legal advice context. He says the advice was not sought by the University from its legal adviser or given by the legal adviser qua lawyer. He says that the context was not one in which the University had an expectation that the content of the legal advice would never afterwards be disclosed. He says the context was one in which the genuineness of the reason given for dismissal might have to be demonstrated to a Tribunal and might have to be challenged by the employee. That, he says, is indeed what happened in the letters of 27 January and 2 February and 11 March.

[20]I reject this submission. It is true that the University's legal adviser has set out the substance of her advice in subsequent correspondence, but it does not follow for a moment that the communications to and from her in January for the purpose of obtaining legal advice were not privileged. They fall fairly and squarely within the scope of legal professional privilege. The fact that a client is seeking "backing" for a course the client already wishes to take does not put the communications outside the ambit of legal professional privilege. The fact that the client may hope or intend in due course to deploy the legal advice and that perhaps even the circumstances in which it was obtained as part of its case does, not there and then, put the communications outside the ambit of legal professional privilege.

[21]If, in due course, the client deploys the legal advice and the circumstances in which it was obtained as part of its case, that may result in waiver of the privilege, but that is a different issue. I would add that this submission, namely that the documents were not covered by legal professional privilege at all, does not appear to me to have been a submission made, at any rate with any great clarity, to the Tribunal below, but I reject it on its merits. Limitation of Privilege in Tribunal Proceedings

[22]Mr Potter's second submission refers to, and builds upon, two cases in, respectively, the National Industrial Relations Court and the Employment Appeal Tribunal, M&W Grazebrook v Wallens

[1973] IRLR 139

and New Victoria Hospital v Ryan

[1993] IRLR 202

. Mr Potter submits, by reference to these authorities, that in Employment Tribunal proceedings, the scope of privilege is limited. I reject this submission. The cases to which Mr Potter refers are not concerned with the scope of legal advice privilege where professional legal advisers are engaged. They neither purport to nor could cut down the effect of legal advice privilege in such a case. They are concerned rather with the special provision as regards litigation privilege and perhaps legal advice privilege of other advisers such as personnel managers who are sometimes involved in legal proceedings. The two authorities have no bearing on the advice which was given or the communications which passed to and from Mrs Halliday. Normal principles apply to those documents or communications. Waiver

[23]Mr Potter's third submission is that privilege has been waived by the University in this case. He refers, in particular, to paragraphs 20 and 24 of the University's response. He says that the effect of those paragraphs is to waive privilege in communications between the University's in-house legal adviser and members of the University's human resources department concerned in the termination of Dr Kelly's employment. He relies on Buttes Gas & Oil Company v Hammer & Others

[1981] QB 223

. In that case, the facts of which are far removed from this, Donaldson LJ said at page 252:

"On waiver, McNeill J held that references in the pleadings to a document or to its content does not of itself waive any privilege which attaches to it. It must be right that their reference to a document in a pleading does not waive any privilege attaching to it as otherwise, there would be no scope for taking objection under RSC Order 24 Rule 11(1) where the notice was served under Rule 10(1). If, on the other hand, a document is reproduced in full in the pleading, its confidentiality is gone and no question of privilege could arise. Where the line is drawn between these two extremes may be a matter of some nicety"

. Brightman LJ said at page 268: "So far as waiver by pleading is concerned, I agree with the Judge that reference to a document or to its contents in a pleading does not waive any legal professional privilege attached to it. Lord Denning MR had said: 'In general it is clear that if a party refers in his pleadings to a document, the other side is entitled to require it to be produced but that it is open to the pleader to object to its production' ".

[24]I reject Mr Potter's submission. Firstly, in my judgment, the Response does not identify any communication as such to which waiver might attach, even giving the extended meaning to the word "document" which is found in the Civil Procedure Rules. There is no document identified in the response. Secondly, more fundamentally, the response does not set out, deploy or rely on the advice in such as way as to waive privilege in it.

[25]However, while rejecting this submission, I must sound a cautionary note for the future. In his judgment, Brightman LJ went on to say at 1981 QB 268:

"It is to my mind equally clear that a party cannot rely on a privileged document so pleaded without thereby waiving the privilege. Therefore, sooner or later, Buttes will have to decide whether to forego privilege in respect of a privileged document which is pleaded or to abandon reliance on it. If they sit on the fence until the trial, if any, begins or is in actual progress, they will do so at their own risk. Circumstances might arise in which the other side could properly claim to be entitled to an adjournment at Buttes' expense. Whether Occidental could force Buttes to step down from the fence prior to the trial by an application to strike out a pleaded document in respect of which privilege is maintained, does not arise for decision on this appeal, but I would think that Occidental might be able to do this"

. I am entirely satisfied for the reasons that I have given that no privilege has been waived by the University at this stage. I note, however, the way in which the University's case is put in the alternative. I have summarised it already as an alternative case. The University seek to say that she was dismissed because she could not continue to work in her role without contravening a duty or restriction or she was dismissed for some other substantial reason, namely the genuine belief of the University that her employment had terminated by operation of law or because it would commit a criminal offence by continuing to employ her. The first formulation (duty or restriction) appears to rely on the objective legal position; but the second formulation (some other substantial reason) appears to rely on the advice given, and a genuine belief in that advice.

[26]Mr Chronias says that when witness statements are served and the case is put at trial, it will be possible for the University to put its case without deploying or relying on the legal advice which was given and therefore without disclosing that legal advice as such. It is premature at the moment to consider whether he is right or not. However, nothing in this judgment should be taken as saying that if the University's witnesses in due course rely on the advice given, that they will be able to do so without waiving privilege or that they will be able to "cherry-pick" the documents and parts of the advice that they rely on. In this context, of course, I use the word "cherry-pick" as one that has been discussed in a number of the authorities concerning expressed and implied waiver. It is premature to consider those points at this stage but, as I say, nothing in this judgment should be taken as determining one way or the other arguments which may arise at a later stage in this litigation. Suffice it to say that I am entirely satisfied that, at the moment, privilege in the relevant class of documents exists and has not been waived and that there was no proper legal basis for the order dated 2 September to have been made. For those reasons, the appeal will be allowed and the order dated 2 September will be set aside.

order

"to disclose to the Claimant's representative on or before 9 September 2005 such documents specified below as are or have been in the Claimant's possession or power". The order then continued: "As per letter dated 18 August from the Claimant's representative (copy herewith)". The Form of Order