Appeal No. UKEAT/0585/11/CEA
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX
At the Tribunal
On 29 November 2011
Before
HIS HONOUR JUDGE PETER CLARK
(SITTING ALONE)
EVERSHEDS
LLP APPELLANT
MR
C GRAY RESPONDENT
Transcript of Proceedings
JUDGMENT
SUMMARY
PRACTICE AND PROCEDURE
Preliminary issues
Case management
Whether issue as to whether certain communications between the
parties are covered by without prejudice legal privilege, to be heard at a PHR,
ought to be heard in private under ET Rule 16(1)(b). Employment Judge ruling
that it should be in public reversed.
HIS HONOUR JUDGE PETER CLARK
Introduction
1.
The parties in this matter, which is proceeding before the London
Central Employment Tribunal, are Mr Gray, Claimant, and Eversheds LLP,
Respondent. This is the full hearing of an appeal, at the direction of
HHJ Hand QC on the paper sift, by the Respondent against the decision
of Employment Judge Ms A Stewart, sitting alone at a
Pre-Hearing Review (PHR) listed on 12 October 2011, dismissing the
Respondent’s application for that PHR to be held in private. Her Judgment with
Reasons was promulgated on that day. Whether her ruling was, in truth, an order
rather than a Judgment is not material for present purposes.
Background
2.
I take the outline history from the parties’ fully pleaded cases. The
Claimant is, I infer, a highly experienced solicitor, now aged 48 years, who
was recruited by the Respondent firm of solicitors to open their office in Edinburgh. He joined the firm as an equity partner with effect from
14 July 2008.
3.
On about 9 March 2009 he went off sick. He was diagnosed with
Lupus, an auto-immune disease and a serious condition which required
chemotherapy treatment. The Respondent accepts that he is disabled for the
purposes of the Disability Discrimination Act 1995 and
after 1 October 2010, the Equality Act which came into
effect on that date.
4.
He was unable to return to work until 12 July 2010 and on
3 September 2010 went off sick again; his General Practitioner then
diagnosed him as suffering from reactive depression, said by the Claimant to
represent a further disability.
5.
In setting out his case in his Particulars of Claim the Claimant refers
to a number of discussions between representatives of the Respondent and his
legal advisor. He contends that those discussions do not attract without
prejudice legal privilege.
6.
In their grounds of resistance the Respondent devotes a final section (paragraphs
77 to 85) to a submission that certain specified passages in his Particulars of
Claim ought to be ruled inadmissible at a hearing of his various claims of
disability discrimination, relying on without prejudice privilege. It is
important to record, at this stage, a measure of agreement between counsel that
this without prejudice issue is at least arguable on both sides, whilst of
course each asserts that their position is correct.
7.
By letter dated 3 August 2011 the Respondent applied for a PHR
to determine the without prejudice issue and for that PHR to be held in
private. A direction was given at a Case Management Discussion (CMD) held on
18 August that a PHR be held: the question as to whether or not that was
to be held in private or in public was to be determined at the outset of that hearing.
8.
The matter came before Employment Judge Stewart on
12 October. The Respondent’s application for the hearing to be in
private, opposed by the Claimant, was considered and rejected by the judge;
hence this appeal.
The Employment Judge’s ruling
9.
In her Reasons, the judge directed herself as to Rule 16(1)(b) of the Employment Tribunal Rules of Procedure 2004,
which provides:
“16.
(1) A hearing may be conducted in private for the purpose of
hearing from any person evidence or representations which in the opinion of the
Employment Judge is likely to consist of information -
(b) which has been communicated to
him in confidence, or which he has otherwise obtained in consequence of the
confidence placed in him by another person.”
10.
As I have noted, it is anticipated that at the PHR the judge will hear
live oral evidence from four witnesses in addition to receiving documentary
evidence and submissions.
11.
The judge noted the Respondent’s submission that without prejudice
material is confidential information (paragraph 4) and observed (paragraph 5)
that in general the private duty of confidence will not alone, that is of
itself, prevent relevant material being brought before the Employment Tribunal
as evidence in a case. She referred to commercial secrets, sensitive financial
information or intimate personal details, frequently leading to applications
for a private hearing on the grounds (there are three of them, including ground
(b) with which I am concerned) contained in Rule 16(1).
12.
Having directed herself as to the public policy behind without prejudice
discussions (paragraph 6), she also correctly directed herself as to the
competing principles of open justice (paragraph 7). Her reasoning, leading to
her conclusion that the Respondent’s application failed, appears at paragraphs
8 to 10. I should set those passages out in full:
“8. In this case the Tribunal’s decision is that the fundamental
reason for protecting without prejudice communications will be preserved by the
findings and eventual Judgment of this Pre-hearing Review ordering the
exclusion of any material which is found to be without prejudice from the
consideration of the Tribunal at the Full Merits Hearing. That will be a
differently constituted Tribunal to the present Tribunal and will not see any
without prejudice material disputed at this Pre-Hearing Review.
9. This Tribunal is not persuaded that the holding of the
Pre-hearing Review in private is necessary for the purposes of the protection
of without prejudice material. The Full Merits Hearing Tribunal would, in any
event, be well able to disregard any non-admissible material and if necessary
application can be made in relation to the Promulgation or temporary
withholding of the Judgment from the Pre-hearing Review from the file in order
to ensure that the Tribunal at the Full Merits Hearing do not have sight of it.
10. Further, the Tribunal is not persuaded that private
confidence in the material in dispute in this case is sufficient to warrant ordering
that the Hearing be held in private.”
The appeal
13.
It is axiomatic that appeals to the EAT, including appeals against
interlocutory rulings, which this appears to me to be, lie only on a question
of law. Although, in the best traditions of Appellants before this Tribunal,
Mr Croxford includes a perversity ground in his Notice of Appeal, I first
look to see whether this Respondent has made out an error of approach in law by
the Employment Judge.
14.
Although I have been referred to a number of authorities, none is
directly in point. I therefore turn to the Employment Tribunal Rules of Procedure
2004.
15.
Before going to Rule 16(1)(b), with which I am directly concerned,
Mr Croxford draws my attention to Rule 17, which provides that CMDs shall
be held in private, although any determination of a person’s civil rights or
obligations shall not be dealt with at a CMD, and no strike-out order under
Rule 18(7) may be made at a CMD. In either of those circumstances a PHR is
appropriate. Interesting questions might have arisen as to whether the without
prejudice issue in this case could have been dealt with at a CMD. On balance I
think that the answer to that question is probably no, but it matters not,
because the issue has been set down for a PHR and there is no appeal against
that case management ruling.
16.
Looking at Rule 16(1)(b) it requires the following questions to be
answered by the Employment Judge:
(1) Will
evidence or representations be heard at this PHR. The answer is yes, four live
witnesses are to be called by the parties.
(2) Is
that evidence likely to consist of information identified in sub-rule (b)
(3) That
is to say, is it information which has been communicated to the witness in
confidence or which he has otherwise obtained in consequence of the confidence
placed in him by another.
(4) If
Rule 16(1)(b) is engaged in these circumstances, ought the Employment Judge to
exercise her discretion in favour of ordering a public or private hearing?
17.
Returning to the Employment Judge’s Reasons, it seems to me that there
are two material gaps in her reasoning process: first, there is no clear
finding as to whether the judge accepted or rejected the Respondent’s primary
contention referred to at paragraph 4, that without prejudice material is, by
its nature confidential and falls within Rule 16(1)(b). Secondly, there is no
finding as to whether it is likely that the evidence will consist of sub-rule
(b) confidential information.
18.
Those omissions strike me as material errors of approach in law because
it is only once those questions are answered that the judge can determine
whether Rule 16(1)(b) is engaged and if so, to then carry out the balancing
exercise between the public policy considerations of the need for a public
hearing, so that justice may be seen to be done, and the need for
confidentiality in without prejudice negotiations, designed to resolve existing
or contemplated proceedings. For these reasons I shall allow this appeal and
set aside the judge’s ruling.
Disposal
19.
Ms McKie, in her written skeleton argument, asks me to exercise my
powers under s.35(1) of the Employment Tribunals Act 1996
if I allow the appeal and decide the question of a private or public PHR hearing
myself, rather than to remit it back to the Tribunal for that purpose. I did
not understand Mr Croxford to take any different position. I shall accede
to that suggestion.
20.
Dealing with the two questions left unanswered by the Employment Judge,
it is common ground that true without prejudice discussions are confidential.
I agree. Offers, if any, made by A to B with a view to settling existing or
contemplated litigation, are confidential to the parties. Secondly, in
determining whether it is “likely” that any of the discussions in issue will be
found to be genuinely without prejudice, the issue to be determined finally at
the PHR, I have formed the view, based on the detailed rival contentions in the
pleadings, that the Respondent passes that hurdle. In reaching that conclusion
I adopt the test applied to the word “likely” in, for example, s.129 of the Employment Rights Act 1996,
the interim relief provision (see Taplin v Shippam [1978] IRLR 450). Accordingly I am satisfied that
Rule 16(1)(b) is engaged in this case.
21.
In carrying out the balancing exercise to which I have earlier referred,
I do not for a moment underestimate the importance of public hearings (see Storer v British Gas [2000] IRLR 495). Nor do I disregard the Article 6 right to a fair and public hearing.
However, against that important principle of public policy, I accept
Mr Croxford’s point that the public policy in not treating as admissions
by a party at trial things said during protected settlement negotiations goes
further than giving that protection to parties, it represents a principle that
goes to the interests of justice and thus falls squarely within the proviso to
Article 6. It is in the interests of justice that parties to civil disputes
may enter into negotiations with a view to resolving such disputes in the
knowledge that those negotiations will remain private and confidential.
22.
My conclusion, balancing those competing policy interests, is that this
PHR be held in private. I am comforted in reaching that conclusion by the fact
that if the Claimant is right and the discussions in issue are not covered by
without prejudice protection, that will be made clear in the PHR Judgment and
that material will be admissible at the full hearing held in public.
Conversely, if the Respondent is right, then it is proper that such
confidential discussions should remain private.
23.
I shall allow this appeal and substitute a direction that the PHR be
held in private.
