Privilege and The So-Called “Iniquity Exception”

The outcome of the English Court of Appeal’s judgment in Curless v Shell International Ltd [2019] EWCA Civ 1710 is to overturn an Employment Appeal Tribunal’s decision that decided that a confidential email passing between one of the defendant’s in-house lawyers and a seconded external lawyer was not privileged, because it was caught by the “iniquity exception”. The outcome will be welcome by many because it gives priority to the importance of legal professional privilege and recognises that the policy underpinning it does not compete with any other policy – for example, the interest in transparency.

The Employment Appeal Tribunal’s decision (which itself reversed a lower tribunal decision) raised a few eyebrows, as it appeared to widen the scope of the so-called “iniquity exception” to privilege. Properly construed, the exception is not really an exception but a recognition that a communication in furtherance of a crime or a dishonest purpose does not attract privilege.

In Curless it was alleged that the email in question, which appears to have been anonymously leaked to the claimant, was tantamount to a thinly disguised attempt by the employer to dress up his departure as (among other things) a redundancy. However, there does not appear to have been any dishonest or other criminal intent on the part of the employer’s representatives. While the employer’s alleged strategy may have given rise to a civil cause of action, the Court of Appeal held that it did not amount to an iniquity and the email did not lose its privileged status.

The judgment raises a number of interesting points, relevant in Hong Kong, including;

  • legal advice privilege is a fundamental right of all legal persons, whether individuals or corporates. The policy that underpins it is pre-eminent. Once a proper claim is made to legal advice privilege, the claim does not compete with other policies. It is, therefore, important that claims to privilege are made on a document by document basis (and not on a blanket basis), and that such claims are not abused;
  • the so-called “iniquity exception” is no more than an acknowledgment that a communication in furtherance of a crime cannot be privileged. The so-called “exception” needs to be kept within proper confines – for example, it is confined to communications used in furtherance of a criminal, dishonest or nefarious purpose. In the context of Curless, many lawyers might be forgiven for thinking that even if the content of the email had the meaning as alleged by the claimant there was nothing particularly remarkable about it. For example, the email arguably contained the sort of advice that lawyers give “day in, day out” – it was legal advice, as properly construed, in that it related to an employer’s rights and obligations in a relevant legal context;
  • importantly, the email in dispute does not appear to have evidenced an attempt by the employer to evade their lawful responsibilities – rather, the email appears to have been advice given in an effort to minimise liabilities in a legal context;
  • a number of practical points also arise. Busy in-house lawyers should be careful how they phrase delicate matters and the old adage holds true – if the content of an email or a letter is sensitive, before sending the email or letter give thought to how a tribunal might interpret it. The case is also an example of the relatively high threshold to be overcome in order to persuade a court to grant an “anonymity order” with respect to the parties’ names (see, Re Value Convergence Holdings Ltd [2019] HKCFI 1631), or to admit fresh evidence on an appeal (see, Chong Hing Bank Ltd v Fairview City Ltd [2019] HKCA 1033).

Finally, Curless v Shell International Ltd comes after other recent and robust judgments of the English Court of Appeal, in support of legal professional privilege (for example, Addlesee & Ors v Dentons Europe LLP [2019] EWCA Civ 1600 and SFO v ENRC Ltd [2018] EWCA Civ 2006). It could be that it is becoming safer to visit English shores.


Senior Consultant, RPC