In these tighter times, it is understandable employers may look to employment consultants rather than employment lawyers for their labour law advice and assistance. Consultancy firms (rightly or wrongly) may be perceived as compact and less formal. Such firms undoubtedly have a place in the array of personnel services available to businesses. But a recent English case has sounded a warning to those using such consultancy firms in relation to the confidentiality of communications and advice.

The service offered by some employment consultants extends to the provision of legal advice and representation in Employment Tribunal proceedings by legally and non-legally qualified individuals.

The recent decision which has implications was made by the Employment Appeal Tribunal in Howes v Hinckley & Bosworth Borough Council [2008] EAT/0213/08 last year, in relation to the discovery and inspection of communications between an employer and his employment consultant where advice of a legal nature is sought and given.

Discovery is the process by which a party has a duty to disclose to his opponent of all the relevant documents which he has or has had in his possession relevant to his case or that of his opponent. A party is not entitled to inspect all such documents as some of these documents may be protected by privilege. Privilege has the effect of barring that party from viewing those documents protected by it.

One type of privilege is legal privilege. Legal advice privilege protects confidential communications between a client and his lawyer insofar as the provision of legal advice is concerned. In other words, the Advocate/Client relationship is generally sacrosanct for the public policy reason that in order to be properly advised a person must feel able to tell his Advocate everything in confidence. Litigation privilege, on the other hand, can protect communications between a client and/or his lawyer and/or a third party where litigation is under contemplation by the parties concerned.

The Employment Appeal Tribunal made it clear some years ago that legal advice privilege only attaches itself to those who are professionally qualified, who are members of professional bodies, who are subject to the rules and etiquette of their professions and who owe a duty to the Court. It was thought until recently that this extended to all legally qualified individuals.

The decision in Howes however may have altered this position. In Howes, the employee making the claim was seeking disclosure of advice received by her employer from a qualified solicitor, though seemingly acting in the capacity of an employment consultant. This was resisted by the employer on the grounds of legal advice privilege. While the application for disclosure was dismissed in any event as the documents sought were not relevant to the matters in issue, the Employment Appeal Tribunal made two interesting points. The Employment Appeal Tribunal not only reiterated that legal advice privilege did not attach itself to advice given by employment consultants but further decided that such privilege could not be taken advantage of by qualified lawyers who do not act in that capacity in giving the advice.

The ramifications of these judicial observations could be significant. Potentially, if the Manx Courts or Tribunals follow this precedent (English case law being persuasive here in the absence of relevant Manx authority), it could mean that any initial employment advice given by an employment consultant to an employer, where litigation is not the dominant reason for getting the advice, can be inspected by an employee who lodges a claim with the Tribunal, or starts proceedings in the High Court against the employer. Such communication might contain damaging admissions by the employer, which could be used in proceedings by the employee against the employer. Such admissions might be difficult to explain in a subsequent hearing. If such evidence is relied upon in open court, this evidence would then be in the public arena.

It is therefore wise to be aware of the situation as communications between an employer and its employment consultant (including a qualified lawyer if not acting in that capacity) which the employer would have expected to remain in-house may nevertheless end up being disclosable, inspectable and in the public domain.

That is not to say such consultants should not be engaged; on the contrary, they can provide a compact and convenient resource, particularly for smaller businesses. But before matters turn into potential employment disputes, employers should consider whether a firm of Advocates – and the legal advice privilege that attaches to their advice – might be a safer avenue in any given case.

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