Attention Employers: the Problem With Using HR Consultants for Legal Advice

legal advice privilege

Are you an employer?

Do you use the services of HR consultants?

Did you know you may have a major problem concerning advice you may receive from your HR consultants if you face a claim from an employee?

This is as a result of an Employment Appeals Tribunal unfair dismissal case concerning a man in Monaghan, Mr. Carron.

Let me explain.

Legal Advice Privilege

An EAT decision in a claim for unfair dismissal, Richard Carron (claimant) against Fastcom Broadband Limited t/a Fastcom (respondent) UD1515/2013
held that legal advice privilege did not attach to advice given by HR consultants or non lawyers.

Think about this: the advice given by HR consultants to you as an employer may be available to a disgruntled employee once he makes a data protection request.

The background in Mr. Carron’s case was that his employer, Fastcom had been advised by Peninsula Business Services (Ireland) Limited, a well known provider of HR services to employers. Mr. Carron made a data protection request of his employer in preparation for his unfair dismissal claim.

This request obliges the employer to give all records in electronic or paper form which mention the employee, the data subject. Fastcom, in complying with this request, did not hand over the advice they received from Peninsula claiming legal advice privilege.

However, this was challenged by Mr. Carron and his solicitor, Mr Brian Morgan of Morgan McManus Solicitors.

The EAT looked at the case law here and in the UK, and other authorities, which dealt with this issue of legal advice privilege and held as follows:

The authorities are to the effect that legal advice privilege is privilege over communication made either to or by a lawyer during the course of a professional legal relationship. The definition of a lawyer for this purpose includes Solicitors, Barristers, In-House Lawyers, Foreign Lawyers and the Attorney General see (“Evidence” Declan McGrath Second Ed), Pages 663 and 664). For the purposes of this Determination the Tribunal accepts that legal advice privilege attaches only to such communications between lawyer and client and vice versa which seek or contain legal advice. Giving legal advice by a non-lawyer does not appear to attract the protection of legal advice privilege.

So, the EAT held that legal advice privilege only applied to the lawyer and client relationship, and consultants or representative bodies or non lawyers were not entitled to this privilege.

Litigation Advice Privilege

That is not the end of the matter, however, as there is a second type of legal advice privilege long recognised by Courts: litigation advice privilege.

Litigation advice privilege is advice given by a lawyer to his client when preparing for litigation. The EAT in this case held that litigation advice privilege may apply to advice given by non lawyers-for example consultants or representative bodies or other advisers. This would only apply to advice given after the employer has been notified of a claim and litigation is in being or pending.

The EAT held:

“Once litigation is in prospect or pending, communications between a client and his solicitor or agent or between one of them and a third party is privileged if it comes into existence for the sole or dominant purpose of giving or getting legal advice for the purpose of the litigation or collecting evidence for that purpose.” Flannery v Catharsis Technology [2015] IEHC 714 per McGovern J. The Tribunal accepts that privilege attaches to the communications between the respondent and their advisors Peninsula Business Services (Ireland) Limited from the time when they were notified of the complaint of unfair dismissal being made to the Workplace Relations Service on the 29th of October, 2013.”

Here is the full decision of the EAT in Carron v Fastband Broadcom Limited UD1515/2013; it is worth a read. (Please note this case is under appeal to the Circuit Court, and I also understand there is a High Court case dealing with the same issue of privilege for HR consultants in employment law cases.)

The type of advice an employer may obtain from a HR consultant, and which may be available to an employee in compliance with a data protection request from the employee, includes:

  • Information about an employer’s exposure to claim(s) from a particular employee,
  • Advice on getting rid of troublesome employee(s)
  • Confirmation of liability of the employer in any particular set of circumstances
  • Advice about investigations or disciplinary procedures in respect of an employee
  • Possible sanctions against an employee
  • What might be included in a settlement agreement to negotiate the employee out of the workplace.

What does this mean for employers?

As things stand you may want to consider carefully the type of services and advice you ask your HR provider to give you. Clearly, getting a staff handbook or contracts of employment or assistance with an investigation is one thing.

But getting advice about a problematic employee or an issue that has arisen in the workplace which may ultimately lead to a claim from the employee may see that advice being made available to the employee in question.

Getting advice from a lawyer, however, solves this problem as it is long recognised as attracting the benefit of privilege. In fact, it is recognised as a fundamental human right which is particularly important in criminal defence cases.

Legal advice privilege is a fundamental of the lawyer/client relationship and is confidential communication between a lawyer and his/her client for the purpose of giving or seeking legal advice.

Litigation privilege, on the other hand, is not restricted to lawyers and their clients but includes third parties and allows the preparation of a case free from the fear of premature disclosure.

But litigation privilege only arises once litigation is in being or ‘reasonably in prospect or contemplated’ and the sole or dominant purpose of the communication is for preparing or dealing with the litigation. A mere possibility of litigation, or ‘a distinct possibility’ or ‘sooner or later someone might make a claim’ is not enough for litigation privilege to arise.

Litigation privilege-dominant purpose

This dominant purpose test is important; if documents were prepared which had as their dominant purpose dealing with the litigation then they will have litigation privilege and will not have to be disclosed to the other side.

This ‘dominant purpose’ test has been endorsed by the Supreme Court in Gallagher v Stanley [1198] 2 IR 267. Other authorities for the ‘dominant purpose’ test when it comes to litigation privilege include Silver Hill Duck v Minister for Agriculture [1987] IR 289 and Flannery v Lexington Services Ltd [2015] IEHC 714.

Moreover, the dominant purpose has a relatively high threshold as held in Tchenquiz and others v Director of the Serious Fraud Office and others [2013] EWHC 2297(QB).

A further nuance in this area is the decision in Quinn v IBRC [2015] IEHC 315 in which the High Court held that litigation privilege may apply to documents prepared with a dominant purpose of engaging with regulatory and investigatory processes.

Litigation privilege-subsidiary purpose?

An extension of this development arose in the English High Court in Bilta (UK) Ltd (in Liquidation) v Royal Bank of Scotland [2017] EWHC 3535 (Ch). In this case litigation privilege was held to apply to documents prepared as part of an internal investigation. The Court appeared to set aside the ‘dominant purpose’ requirement in respect of privilege and held that a subsidiary purpose of finding out facts as part of an investigation could attract litigation privilege to such documents.

Conclusion

If the advice given my HR consultants/advisors is not given legal advice privilege the significant question which then arises is whether litigation privilege arises. This will depend on the particular facts and circumstances of the case and there is a wide range of possibilities.

For example, an assault in the workplace, which is reasonably expected to lead to litigation, to a minor matter which will only lead to a verbal or first written warning in the disciplinary procedure.

(The above is my brief summary of a detailed paper on this topic which Brian Morgan of Morgan McManus Solicitors delivered in the Law Society Employment Law Masterclass on 9th March, 2018).