Brennan & Ors v Sunderland City Council Unison GMB [2008] UKEAT 0349_08_1612 (16 December 2008)

JUDGMENT © Copyright 2008 APPEARANCES For the Appellant MR PHILIP ENGELMAN (of Counsel) Instructed by: Messrs Stefan Cross Solicitors Buddle House Buddle Road NEWCASTLE-upon-TYNE NE4 8AW For the First Respondent MR DAVID READE (One of Her Majesty's Counsel) and MR SEAMUS SWEENEY (of Counsel) Instructed by: Robert Rayner, City Solicitor Sunderland City Council Legal Services P O Box 113 Civic Centre SUNDERLAND SR2 7DW For the Second and Third Respondents MR ANTONY WHITE (One of Her Majesty's Counsel) and MR JASON GALBRAITH-MARTEN (of Counsel) Instructed by: Messrs Thompsons Solicitors The St Nicholas Building St Nicholas Street NEWCASTLE-upon-TYNE NE1 1TH SUMMARY PRACTICE AND PROCEDURE: Admissibility of evidence The claimant sought disclosure of certain legal advice on the basis that its effect, and a summary of its contents, had been put before the court and therefore privilege was waived. The Tribunal rejected the application and the EAT held that they were right to do so. Consideration of the operation of waiver principles. THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT) This is yet a further skirmish in the ongoing litigation brought by Mrs Brennan and others against the City of Sunderland and two trade unions. The proceedings began with claims for equal pay lodged in 2003 and many further claims have since been made. There are a number of defences, including certain genuine material factor defences (GMF) pursuant to section 1(3) of the Equal Pay Act 1970 . The employers contend that even if the work is of equal value, nonetheless the differences in pay between the claimants and their chosen comparators are explained by factors other than sex. From time to time the parties surface from the Employment Tribunal in Newcastle to obtain a ruling on some disputed matter from the EAT, and scuttle back to continue the battle below. This is the third appeal relating to this particular litigation that I have heard in the course of the last year. The first was brought by the two trade unions and concerned the question whether a claim made against a trade union pursuant to section 77 of the Sex Discrimination Act could be heard in the Employment Tribunal. I held that it could: see UNISON v Brennan [2008] IRLR 492 . The second, brought by the council, concerned an interlocutory decision of the Tribunal to defer making a decision whether the council's Job Evaluation Scheme was valid until after there had been a hearing of a GMF defence. There are two distinct material factor defences relied upon; one relates to the period before 1 October 2005, which was the date the new job evaluation scheme came into effect, and the other relates to the period after that date. I held that the Tribunal could hear the pre-October 2005 GMF defence but not the defence relating to the later period. I concluded that it would be wrong to hear the application of that defence with respect to the period after the scheme came into force without first considering whether to allow the claimants to amend their claims to challenge the validity of the job evaluation scheme and, if permitting the amendment, without also determining whether the scheme was valid or not. The wider background to the current proceedings is set out in paragraphs 5 to 13 of the judgment that I gave on the second appeal: see UKEAT/0219/08. I will not repeat those paragraphs here, since they are not necessary for the purpose of understanding this appeal. This time the appeal has been brought by the claimants. It arises out of an application by them for disclosure of the council's legal advice and other documents with respect in particular to the question what period of pay protection would be lawful when introducing the new job evaluation scheme. The advice, it is alleged, is potentially relevant to the post October 2005 GMF issue. The hearing dealing with the GMF defences began on 21 May 2008. It continued until 13 June 2008, at which point it was adjourned part-heard to be reconvened in July 2008. On 12 June, that is, shortly before the break, the claimants made an application for disclosure, and this was refused by the Employment Tribunal in a judgment delivered on the 25 June 2008. That is the subject of this appeal. The second appeal before the EAT, to which I have made reference, was heard on 17 June and I made an order in the terms I have indicated above on the 25 June. When the GMF hearing resumed on 14 July the Employment Tribunal allowed the amendment to challenge the validity of the Job Evaluation Scheme, and considered further evidence relating to the period pre-October 2005 with respect to the GMF defence. It also permitted some evidence to be completed with respect to the post October defence because certain witnesses wished to give evidence with respect to both periods. The evidence concluded on 21 July and the parties adjourned until 29 July for closing submissions. The Employment Tribunal retired on 5 September 2008 and judgment is still awaited on the application of the GMF with respect to the pre-October 2005 claim. As I have said, this current appeal will have no impact on that aspect of the case; it is relevant only to the GMF defence in so far as it applies post 2005. A series of further dates, stretching into 2010, have been identified for further hearings. The validity of the job evaluation scheme will be heard at various dates in 2009, and the application of the GMF defence with respect to the post October 2005 period (if it is still relevant) in March 2010. The decision under appeal . The application by the claimants was for disclosure of the following documents: (1) All legal advices on the issue of pay protection, and (2) Un-redacted Minutes of, and reports to, the council in relation to cabinet meetings held on 7 December 2005 and 18 January 2006. These two areas were referred to as the reference issue and the redaction issue respectively. A summary of the issues. The reference issue arose out of the evidence of a Mr Rawling, the Assistant Corporate Head of Personnel. He was a council witness who gave evidence about certain joint problem solving meetings which had taken place between officers of the council and the trade unions. They resulted in successful negotiations leading to the implementation of the Job Evaluation Scheme. The Job Evaluation Scheme included arrangements for protecting the pay of those who otherwise would lose out as a result of the re-evaluation. Such pay protected arrangements are commonly found when new job evaluation schemes are introduced. The claimants submitted that five particular entries in the notes of the joint problem solving meetings, which were exhibited to Mr Rawling's witness statement, contained or referred to legally privileged information - particularly legal advice from counsel - and that the council had waived privilege by using or deploying this information. The redaction issue arose as follows. Another council witness, Mr Beardmore, the City Treasurer, referred in his witness statement to certain Cabinet meetings held on the 7 December 2005 and the 18 January 2006 respectively and to certain reports submitted to the Cabinet. He made specific mention of matters that were discussed at those meeting. He also quoted from one of the reports, referring to the consequences of one suggestion, namely that affected employees should be dismissed and in each case offered re-employment on new terms. He noted that the cabinet had specifically resolved not to take that route. They had been advised that it would be likely to result in industrial action and severe disruption to front line services. The council agreed in principle to provide both these reports and the Minutes of the meetings, and they did so, but only on the basis that certain information was redacted so as to remove what the council said were either wholly irrelevant issues or were references to privileged information since they amounted to repetition of legal advice either by direct quotation or by stating a position obviously based upon that advice. The minutes and reports certainly raise a number of matters, including the stance taken by the council. They identify various options considered by the council; the financial implications of various options; they demonstrate the reluctance with which the council was being persuaded to extend the protected pay beyond three years; and they refer to how the council might run its case. No doubt the last of these was based on legal advice but the passages did not specifically refer to particular advice. The claimants contended that there was again disclosure of privileged information which had been waived, just as in the case of the notes. The information had been identified and deployed in the same way. Furthermore, they contended for a wider principle, namely that it is not legitimate, at least at the trial itself, to redact parts of a document relating to a particular subject matter. Once the document is disclosed, the whole document has to be made available and it is not legitimate to produce just part of it. This is so even if the redacted parts of the document identify legal advice. By choosing to rely on the document, a party is obliged to reveal it all (save for irrelevant material). The relevant law . Many of the relevant legal principles are not in dispute. The basic principles are as follows: (1) As a matter of public policy, all communications between a legal adviser and/or his or her client are privileged from date of production so long as they are confidential, written by or to the legal adviser in his or her professional capacity, and for the purpose of giving or getting legal advice: see Mallins VC in Wilson v Northampton & Banbury Junction Railway Company [1872] LR 14 Eq 477. The interest which it protects is to ensure that communications between a solicitor and client may be frank and free and should not emerge into the public domain if litigation is subsequently pursued. (2) A party may, however, waive that privilege. Classically, and uncontroversially, this would be so in instances where the party refers in detail to, and seeks to rely upon, part of a document setting out legal advice, but resists the other party's efforts to obtain disclosure of the whole of that advice. (3) Whether or not privilege has been waived is determined by the application of the principle of fairness. In Burnell v British Transport Commission [1955] 1 QB 187 for example, Denning LJ at p190 stated: "It would be most unfair that cross-examining counsel should use part of the document which was to his advantage and not allow anyone, not even the judge or the opposing counsel, a sight of the rest of the document, much of which might have been against him." In Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529 Templeman LJ said (p. 538): "In my judgment, however, the rule that privilege relating to a document which deals with one subject matter cannot be waived as to part and asserted as to the remainder is based on the possibility that any use of part of a document may be unfair or misleading ..." A more recent formulation is seen in the judgment of Mustill J, as he was, in Nea Karteria Maritime Co Ltd v Atlantic & Great Lakes Steamship Corporation [1981] Com. L. R. 138, which has been cited with approval in a number of more recent decisions of the Court of Appeal including Great Atlantic Insurance Co. v Home Insurance and others [1981] 1 WLR 529; Dunlop Slazenger International Limited v Joe Bloggs Sports Limited [2003] EWCA Civ 901 and R v Secretary of State for Transport ex parte Factortame (CO/1735/88): "Where a person is deploying in court material which would otherwise be privileged, the opposite party and the court must have the opportunity of satisfying themselves that what the party has chosen to release from privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out of context would be to risk injustice through its real weight or meaning being misunderstood." This is frequently referred to as the "cherry picking" principle. A party cannot seek to gain an advantage in litigation by placing part of a document before the court and withholding the remainder. (4) The fact that waiver is accidental makes no difference; once waived, the whole document must be produced (or at least all parts of the document relating to that subject matter). So, in the Great Atlantic Insurance case counsel inadvertently waived privilege by referring to part of a memorandum sent by the solicitors to the client without appreciating its origin. (5) A document may be redacted to remove immaterial matter or material of no relevance to the case, whether privileged or otherwise. The principal issue in this case is whether there has been sufficient disclosure of the relevant advice that fairness requires that it should be revealed in full. We turn to consider the issues and the arguments as they were presented to the Employment Tribunal. The hearing before the Employment Tribunal. There were five specific references in the relevant notes exhibited to the witness statement of Mr Rawling and relied upon by the claimants as involving a waiver of privilege. These are as follows: "12.1 H(i) 282 indicated that, at a meeting held on 22 June 2005, Mr Roberts had said: "We are a long way apart. Is it fundamental difference of legal advice. How about we procure joint legal advice or share our legal advice. Our genuine belief can't perpetuate discriminatory bonus earnings. No progress otherwise." 12.2 At H(i) 375, in a meeting held in 6 July 2005, Mr Roberts was said to have stated: "On protection – we still have v. firm legal view, v. nervous, but seeking further view, hopefully by Friday." 12.3 During a meeting held on 20 July 2005 at H(i) 482 Mr Roberts was recorded as saying: "We've pumped £4.3m into the P+G (Pay and Grading) model. Not moral to give the winners more. We've pushed the boundary on legal advice. Can't shift." 12.4 H(ii) 12, relating to a meeting held on 22 August 2005, indicated that Mr Roberts told the trade unions: "On protection – legal advice goes beyond three years. So 1) duration can't move, 2) % in 1 st /2 nd /3 rd year 100/75/50 new offer. No further" and after one of the trade union officials had referred to their own legal advice added "Not asked lawyers to constrain us. Only 'no risk' is no protection. We are also advised to get an independent view" after which the trade union official also said his "legal advice is four years can be defended." 12.5 At a meeting on 28 November 2005 H(ii) 225 indicated that Mr Roberts stated (during discussions at which trade union officials were not present): "How to play this. New/extra legal advice on risk of alternative scenarios. S Sweeney 24/11/05 four years protection as a last resort with many provisos. Big dilemma is Unions' aspiration of Gateshead protection but we can't offer pay increases 'cos makes the gap bigger and make sex tainted payment bigger." Mr Engelman submitted to the Tribunal that each of these notes disclosed legally privileged documentation which had been used or referred to by the council in circumstances amounting to a waiver of privilege. That was particularly so with respect to the last two entries. However even the first three, which do not in terms state what the legal advice was, do so inferentially when considered against the background that the council was seeking to limit the protected pay to three years and the unions wanted longer. The consequence of these disclosures was that the legal advice had to be disclosed to the claimants. Once the council had chosen voluntarily to bring this information before the court, they were using the information and the cherry picking principle should apply. Moreover, even if they were not using the material specifically to advance their case, still the principle should apply. It must be assumed that if a party chooses to bring information concerning legal advice before the court, then it is doing so for some purpose. Mr Engelman placed considerable weight on the decision of the Federal Court of Australia in Bennett v Chief Executive Officer of the Australian Customs Service [2004] FCAFC 237 which we discuss more fully below. Mr Reade, for the council, submitted before the Tribunal that none of these references amounted to the relevant identification of legally privileged material but that even if they did, their disclosure in the circumstances did not constitute a waiver. He submitted that waiver required not merely that there should be some reference to the legal advice but that it should actually be deployed by the council in order to gain an advantage in the litigation. That meant that there had to be an element of reliance on the disclosed material in the legal proceedings themselves in order to advance a party's cause. That was totally lacking here. The trade unions took a neutral stance before the Employment Tribunal on these matters. The Tribunal agreed with Mr Reade that the first four passages did no more than make reference to the fact that there was legal advice and therefore there was nothing to waive. (They had some doubts about the fourth, but nonetheless considered that essentially it should be placed in the same category as the first three references.) However, the Tribunal considered that the fifth passage involved more than mere reference to the fact of legal advice having been taken; it contained a reference to the substance of the legal advice and was therefore privileged information. Whether the reference was accidental - and it appeared to have been included by inadvertence - or not did not affect the status of the information. However, the Tribunal found that even with respect to this information that there had been no waiver. They accepted Mr Reade's submission that waiver required reliance in the sense that the material had to be deployed to gain some advantage, and the council were not specifically seeking to rely upon the legal advice in any way. To use the language of Mustill J in the Nea Karteria case, the information had to be "deployed". The employment judge pointed out that in its military connotation this word suggests that the information is being used in order to effect some advantage. Moreover, the judge observed that the authorities in which waiver has been found to occur have all been cases where some advantage has been sought or has been achieved as a result of using the information. The Tribunal added that even had there been a waiver, it would not have entitled the claimants to all legal advices relating to pay protection, but only those aspects of the advice touching on the period of pay protection. As to the redaction issue, the Tribunal concluded again that none of the material actually disclosed in either the minutes or the reports could be said to be legally privileged material; indeed, much of it was in the public domain. In various ways the information made reference to the council's position and indicated how the case might be run, but it nowhere revealed the substance of any legal advice. In any event, it was not relied upon- not deployed- in any way by the council. Accordingly, there was no waiver. The Tribunal also expressly rejected Mr Engelman's wider submission that it was not legitimate to cover up the legally privileged parts of the material. He had relied upon some observations of Templeman LJ (as he was) in the Great Atlantic case where he said ([1981]WLR 529, 537): "In interlocutory proceedings and before trial it is possible to allow a party who discloses a document or part of a document by mistake to correct the error in certain circumstances. Where a document has been disclosed as a result of misconduct by the defendants, against the will of the plaintiffs and in any event not by the deliberate act of the plaintiffs, then remedial action both before and during the trial may be possible. But in my judgment the plaintiffs deliberately chose to read part of a document which dealt with one subject matter to the trial judge, and must disclose the whole." ... emphasis added.) Mr Reade submitted that these words had to be read in the context of that case, where there had been disclosure of privileged material; in those circumstances the whole document had to be disclosed. However, there was no general principle that a party who chose to adduce in evidence a particular document had to disclose the whole document including privileged information. It was submitted that this was wholly at odds with the judgment of Lord Justice Hoffmann in GE Capital Corporate Finance Group v Bankers Trust [1995] 1 WLR 172. His Lordship noted that the observations of Lord Justice Templeman had to be confined to their context; they had been misunderstood and had led the court to adopt highly artificial devices to ensure disclosure without revealing privileged material. This was not necessary; he said this (p.175 ): " .. The test for whether on discovery part of a document can be withheld on grounds of irrelevance is simply whether that part is irrelevant. The test for whether part can be withheld on grounds of privilege is simply whether that part is privileged. There is no additional requirement that the part must deal with an entirely different subject matter." The Tribunal accepted the arguments of Mr Reade and held that the redaction had been proper and that there was no waiver of privilege. The grounds of appeal . Mr Engelman submits that the Tribunal was wrong with respect to both the reliance and the redaction issues to say that there had been no waiver. In essence, he reiterated before us the submissions that had failed to find favour below. He accepted that merely referring in documents placed before the court to the fact that legal advice had been taken did not constitute a waiver. However, once the gist or effect of the legal advice had been identified in documents before the court, then the party had waived the privilege. There was no separate requirement of reliance on the material waived. The very fact of putting the material before the court constituted use of that material, else why produce it at all? This doctrine did not strictly depend on any concept of fairness, but even if it did, once the material was used in that way, it would fundamentally contravene that principle of fairness to allow the party to withhold parts of the advice; the whole of the advice should be disclosed. With respect to the reliance issue, the Tribunal ought to have found that each of the references in the notes appended to Mr Rawling's witness statement involved a waiver of privilege, but in any event the last one did. As the Tribunal recognised, that involved disclosure of the substance of the advice, and on any view that triggered the waiver principle. The Tribunal was wrong to say that in order to constitute a waiver the information had to be deployed in the sense of being used to advance a party's cause. Mr Engelman placed considerable weight on the Bennett case before me, as he did below. In that case the Australian government's solicitor had written to Mr Bennett's solicitors Stating, what Tamberlin J described as the "substance and effect" of the advice given to the other party "in order to emphasise and promote the strength and substance of the case to be made against Mr Bennett." The judge then referred to the following passage from the judgment of the High Court of Australia in Mann v Carnell (1999) 201 CLR 1. Gleeson CJ, Gaudron, Gummow and Callinan JJJ said (at CLR 13 [29]): "What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some over-riding principle of fairness operating at large. . .. Disclosure by a client of confidential legal advice received by the client, which may be for the purpose of explaining or justifying the client's actions, or for some other purpose, will waive privilege if such disclosure is inconsistent with the confidentiality which the privilege serves to protect ... considerations of fairness may be relevant to a determination of whether there is such inconsistency." (Emphasis added.) Tamberlin J then said this: "Thus, ordinary notions of fairness require that an assertion of the effect of privileged material or disclosure of part of its contents in the course of proceedings before a court or quasi-judicial tribunal be treated as a waiver of any right to resist scrutiny of the propriety of the use he has made of the material by reliance upon legal professional privilege. ... If, in such a document, a party sets forth part of the contents of a particular identified document or communication or asserts the effect of or his reliance upon a particular identified document or communication, it may be that consideration of fairness might require that he be treated as having waived any legal professional privilege in relation to the whole document or communication. ... Where, however, he does no more than make use of privileged material (that is, legal advice, expert opinion or statements of potential witnesses) for the purpose of formulating the statement in such a document of the details of the case which he proposes to make, it would be an affront to ordinary notions of fairness to hold that the effect of his compliance with that procedural requirement was that he has waived his legal professional privilege. ..." Emmet J formulated the principles thus (paras 35-36): " …. Legal professional privilege exists to protect the confidentiality of communications between lawyer and client. It is inconsistency between the conduct of the client and maintenance of the confidentiality that effects a waiver of the privilege. What brings about the waiver is the inconsistency that the court perceives (informed, where necessary, by considerations of fairness) between the conduct of the client and the maintenance of the confidentiality. Disclosure by a client of confidential legal advice received by the client will effect a waiver of privilege if such disclosure is inconsistent with the confidentiality that the privilege serves to protect. It does not matter why the disclosure has occurred: it may be for the purpose of explaining or justifying the client's actions or for some other purpose . However, considerations of fairness will be relevant to a determination on whether there is such inconsistency: see Mann v Carnell (at 13 [28]-[29] and 15 [34]). 36 Thus, in determining whether there is inconsistency between disclosure of the substance of confidential legal advice and maintaining confidentiality in respect of the legal advice, considerations of fairness will be relevant. That is a matter of judgment for a court when called upon to rule on the question of whether privilege has effectively been waived. …"... emphasis added. ) A similar approach was adopted by Gyles J. He agreed with the proposition that: "the voluntary disclosure of the gist or conclusion of the legal advice amounts to a waiver in respect of the whole of the advice to which reference is made." (para 65) Mr Engelman relies upon this case for four principles in particular. First, he says it supports the proposition that the underlying principle is consistency rather than fairness; it is inconsistent to be willing to waive confidentiality with respect to part of the advice but to seek to maintain it with respect to the remainder. Second, it supports the proposition that the voluntary disclosure of the gist or effect of the legal advice is sufficient to constitute waiver. Third, it demonstrates that reliance is not required. Finally, in so far as it is material to consider the purpose for which it is disclosed, it may be for the purpose of explaining or justifying the party's case or, as the passages emphasised above indicate, "f or some other purpose ". The claimants say that applying these principles in this case leads to only one answer, namely that, even if only with respect to the fifth note exhibited to Mr Rawling's witness statement, there is a plain waiver of privilege. Whatever the purpose for which it was disclosed, it was a voluntary disclosure of the contents of the advice; and it would be inconsistent to permit the council to rely on privilege for the whole advice. Furthermore, he submits that the principle of inconsistency is satisfied here. The Council was seeking to advance a case before the court which was inconsistent with its legal advice. It was seeking to maintain that a four year protected pay period was justified and reasonable when in fact its own advice had been indicating otherwise. It would be unjust to allow the full legal advice to be withheld in these circumstances. Mr Reade agrees that the issue is indeed whether confidentiality has been lost. Plainly, if documents are placed in the public domain, then no claim for privilege can succeed. However, when determining whether it is inconsistent to seek to claim privilege -which involves claiming confidentiality for the remainder of the document - the principle of fairness has to be adopted. Where the disclosure is limited, the test is whether fairness requires the whole advice to be provided. Mr Reade submits that whatever may be the position in Australia, in this country the principles are clear: if a part of a document has been referred to, does fairness require that the whole of the document should be disclosed? He says that typically there will be two conditions that need to be met before disclosure is required. The first is that there must be disclosure of the substance of any legal advice. It is not enough simply to refer in very general terms to its effect. Even less is it enough to identify its mere existence (a principle recently confirmed by the Court of Appeal in Rubin v Expandable Services Ltd [2008] 1 WLR 1099 .) Second, he submits that even where there is reference to the substance of the advice, it must be deployed in the sense of being relied upon by the party to advance its case. In this case the Tribunal were right to say with respect to the first four notes relating to the joint problem solving meetings that they did no more than essentially identify that legal advice had been taken and in general terms indicate its effect. That, he submits, goes nowhere. There will frequently be a reference in documents before the court which will demonstrate that legal advice has been taken, yet that has never been considered sufficient of itself to require the content of the legal advice to be disclosed to the other party. The only note that could properly be said to disclose the contents or substance of the advice was the fifth reference. However, the Tribunal was correct to say that it had not been relied upon with respect to any of the issues in the case. Mr White makes a submission which is essentially similar to that advanced by Mr Reade, but he disagrees with Mr Reade in two respects. First, he says that not even the fifth note, treated by the Employment Tribunal as a disclosure of the substance of the advice, should have been seen as giving rise to a risk of waiver. The information had only been provided to the unions in the context of collective bargaining negotiations; it was not provided in the course of litigation, save in a very indirect way as exhibits to an affidavit. It was not a document created specifically for the purposes of litigation and the detail was too sparse even to be capable of giving rise to waiver. The court ought to be particularly slow to infer implied waiver in those circumstances. We could not, however, accede to this submission even if correct, as Mr White conceded. It is the council who have allegedly waived the privilege, and they have not appealed the conclusion of the Tribunal that they have provided the substance of the advice in the fifth reference. We do not think that the union - who made no submissions on the issue below - can seek to have that finding overturned. The second point of difference is really one of emphasis and does not demonstrate any significant divergence as to the relevant legal principles. Mr Reade submits that the underlying principle is one of fairness and that the cases ought to be seen as particular fact-sensitive applications of that principle. They demonstrate that something more than a mere reference to the effect of the advice is required, and there must be reliance on the material adduced before the court, but he accepts that there are no cut and dried principles as to precisely what degree of disclosure is necessary before the principle of waiver is engaged. The question for the Tribunal is always whether there has been sufficient disclosure in circumstances which would render it unfair for the party not to have to disclose the whole of the material advice. Mr White agrees that the underlying principle is that of fairness, but he submits that the application of that concept in these circumstances has crystallised into clear rules and not just general guidelines. The authorities demonstrate, he submits, that the two conditions of disclosing the contents and reliance are not merely the typical or usual requirements which will have to be satisfied; rather they are the preconditions which must be met before any waiver is to be established. Each is a necessary condition before a court can find that the legal advice has been waived; neither is sufficient on its own. Mere reference to the fact that there has been legal advice or to its effect, or to the gist of the advice, is not sufficient to constitute waiver, even if relied upon. Conversely, even a reference to the content or substance of the advice does not avail the other party and lead to any waiver of privilege if that information is not being relied upon with respect to an issue in the proceedings. In this case there was neither the disclosure of the contents nor reliance, and properly analysed the case was a long way away from waiver. Both Mr Reade and Mr White rely upon substantially the same authorities. They referred to a number of Court of Appeal authorities which they say support their analysis that disclosure of contents and reliance is, on any view, central to an analysis of waiver. In Dunlop Slazenger International v Joe Bloggs Sports Ltd [2003] EWCA Civ 901 Lord Justice Waller, with whose judgment Lord Justice Thorpe agreed, expressed the view that the principles of waiver operating in this area, although not altogether easy to discern, are as follows: "… If one goes to one of the text books, Matthews & Malek, one finds at paragraph 10.17 a summary of the position as those authors see it. First of all, in that paragraph there is the reference to the dictum of Mustill J (as he then was) in Nea Karteria , which provides as follows:" "Where a person is deploying in court material which would otherwise be privileged, the opposite party and the court must have the opportunity of satisfying themselves that what the party has chosen to release from privilege represents the whole of the material relevant to the issue in question. To allow an individual item to be plucked out of context would be to risk injustice through its real weight or meaning being misunderstood." "I would describe that as the cherry picking aspect. Then the paragraph reads as follows: "The key word here is 'deploying'. A mere reference to a privileged document in an affidavit does not of itself amount to a waiver of privilege, and this is so even if the document referred to is being relied on for some purpose, for reliance in itself is said not to be the test. Instead, the test is whether the contents of the document are being relied on, rather than its effect. The problem is acute in cases where the maker of an affidavit or witness statement has to give details of the source of his information and belief, in order to comply with the rules of admissibility of such affidavit or witness statement. Provided that the maker does not quote the contents, or summarise them, but simply refers to the document's effect, there is apparently no waiver of privilege. This benevolent view has not been extended to the case where the maker refers to the document in order to comply with the party's need to give full and frank disclosure, eg on a without notice (ex parte) application." So it is that the authors correctly identify that the authorities provide for a distinction between a reference to the effect of the document and reliance on the content. Mr Croxford suggests that this is a reference case and not a deployment case." Both counsel rely on that decision to support their submission with respect to the need to establish each of the two limbs before there can be a finding of waiver. The "benevolent view" as Matthews and Malek describe it, is supported by other authorities which were specifically referred to in the Dunlop case. First, in Marubeni Corporation v Alafousos , explained and approved in Dubai Bank v Galadari (No 2) [1991] WLR 731-739, the deponent to an affidavit sworn on behalf of the plaintiffs, who were seeking permission to serve out of the jurisdiction, stated: "The plaintiffs obtained outside Japanese legal advice which categorically states that this agreement does not render performance of the sale contract illegal in any way whatsoever." At first instance Mr Justice Leggatt concluded that since the paragraph was being relied upon by the plaintiffs, it followed that they had waived privilege. The Court of Appeal disagreed. Lawton LJ drew a clear distinction between the contents of the document and its effect. His Lordship referred to a decision of Sir Wilfred Greene MR in Infields Ltd v P Rosen and Son [1938] 3 All E R 591 who observed that reliance was not of itself sufficient to constitute waiver, and then said this: "… In my judgment, the same principle applies here. All that the deponent was doing was saying: "Well, I am asking the court to allow service out of the jurisdiction. I am being frank with the court. I have received certain information from Japan and I believe it provides no defence to the defendants." In other words, he was not relying on the contents of the document: he was relying on the effect of the document. He had to refer to the Japanese lawyers because he was under a duty to give the source of his information and he could only do so by referring to what they had told him." Lloyd LJ drew a similar distinction between mere reference to a document and a quotation of its contents. The judge noted that: "In some cases it will be hard to draw the line between disclosure of contents and the mere effect of advice" but he was satisfied in the particular circumstances of that case that what was disclosed did not extend beyond the effect of the advice. A third case relied upon was the decision of the Court of Appeal in Government Trading Corporation v Tate & Lyle Industries Ltd (unreported, 24 Oct 1984). That case concerned a reference to information derived from Iranian lawyers. The solicitor in an affirmation had set out his understanding of Iranian law on the incorporation of a Government Trading Corporation in Iran and stated that his information had been derived from a firm of lawyers practising in Tehran, and he believed it to be correct. Lord Justice Robert Goff emphasised that it will often be necessary, particularly in interlocutory applications, to refer to certain facts or certain advice and it may be necessary, in order to provide full and frank disclosure, to refer to the source of that advice. However, he concluded that that was a long way from waiving privilege. As to the question of reliance, again the council and the unions rely heavily upon a number of Court of Appeal authorities. The Dunlop Slazenger case is material to this issue also. It is not necessary to go into the details of that case, but suffice it to say that having noted that the test was whether the contents of the advice were being relied upon, the court then examined with some care the nature of the issues in the case before it concluded that the advice referred to was being specifically relied upon by the party to bolster its position before the court. A similar approach was adopted by the Court of Appeal in the Factortame case ( R v Secretary of State for Transport ex-parte Factortame & Others CO/1735/88). In that case the Secretary of State was willing to make certain advice available on the grounds that privilege had been waived, but not advice after a particular cut off date. The claimants were dubious as to whether the privilege had been properly claimed and sought an order for disclosure of edited documents in order to determine that question. Auld LJ, with whose judgment Popplewell LJ agreed, referred to the well known passage from the judgment of Mustill J in the Nea Karteria case to which we have referred. The judge then continued as follows: "… Of course, the scope for unfairness depends on the breadth of the matter in issue or their severability if more than one, and on the exact relationship and/or relevance to such issue(s) of the documents respectively disclosed and sought to be withheld. It may or may not be that partial disclosure of documents going to a matter or matters in issue, say in an exchange of correspondence with legal advisers, would be unfair. Much depends on whether the party making partial disclosure seeks to represent by so doing that the disclosed documents go to part or the whole of an "issue in question", the expression used by Mustill J in the passage from his judgment in Nea Karteria that I have cited. The issue may be confined to what was said or done in a single transaction or it may be more complex than that and extend over a series of connected events or transactions. In each case the question for the court is whether the matters in issue and the document or documents in respect of which partial disclosure has been made are respectively severable so that the partially disclosed material clearly does not bear on matters in issue in respect of which the material is withheld. … ." Here again, submit the council and the unions, one sees the Court of Appeal focusing on the particular issues and asking whether the party allegedly waiving privilege is intending to rely upon the material disclosed with reference to those issues. Finally, reliance is placed in particular on the decision of the Employment Appeal Tribunal (HH Judge Richardson presiding) in the case of Kelly v University of Southampton UKEAT/0574/05. The respondent had stated in its response to a complaint of unfair dismissal that it had realised that it would be unlawful to continue to employ the claimant after having taken legal advice. The claimant was an immigrant who was entitled neither to remain nor work in the country. The Employment Tribunal ordered discovery of legal advice from an in-house lawyer, but the EAT overturned that order, essentially on the basis that the respondent had not at that stage sought to rely upon the advice. However, the EAT indicated that the position would be otherwise if the stance adopted by the employers changed and they subsequently sought to rely on the advice at trial. So, submit the council and the unions, reliance is crucial and it cannot be inferred merely from the fact of putting the advice before the court. It must go to one of the issues in the case and be used to gain an advantage of some kind in the litigation. As to the alleged inconsistency, Mr Reade submits that as a matter of fact there is no inconsistency between the position adopted by the council in the proceedings and its legal advice. There is nothing which shows that the stance now being adopted is actually at odds with the legal advice. More importantly, Mr Engelman had identified the wrong inconsistency. The inconsistency must relate to inconsistent positions adopted in the course of the legal proceedings themselves; it is the inconsistency of seeking to waive confidentiality in part to gain an advantage on the one hand, whilst seeking to assert confidentiality with respect to the remainder of the document. The relevant inconsistency is not between the position adopted in the course of collective bargaining negotiations and the stance taken at trial. Applying these principles to the facts of this case, both the council and the unions submit that the Tribunal was fully entitled here to conclude that there was no reference to the contents of the advice, save that Mr Reade accepts that the final reference in the notes did fall into that category. As we have said, Mr White disputes that: he says that in the light of the approach adopted by the court in the Marubeni and Tate and Lyle cases it is fanciful to think that the limited reference contained in that note would amount to disclosing the contents or substance, as opposed to the effect of the advice in question. We see considerable force in that submission, but for reasons we have given, we do not think that we can properly interfere with this conclusion of the Employment Tribunal. In any event, they both submit that reliance is a crucial requirement, even where the substance of the advice is disclosed, and that the Tribunal was correct to say that it does not exist here. The Redaction issue . The second legal issue concerns whether the disclosure of parts of the cabinet records and the Minutes of the cabinet meetings require the whole report to be disclosed. The Tribunal did not think that this involved the disclosure of any privileged material at all. The only question therefore, was whether it is necessary for a party which seeks to put in evidence at trial a particular document is entitled to redact the privileged material. As we have seen, the Tribunal held that it was and relied upon the passage of the judgment of Hoffmann LJ (as he was) in the GE Capital Corporate Finance Ltd case. Mr Engelman submits that this principle applies only at the discovery stage. It does not apply to evidence which a party chooses to adduce at the trial itself. The material can be redacted up until the point of trial. Thereafter, if the document is being put before the court, it must be disclosed in full lest a false picture is provided. Mr Reade and Mr White dispute this. They submit that there is no distinction for this purpose between discovery and adducing evidence at trial. It would be bizarre if reliance on a document involved the automatic waiver of any privileged material therein. Lord Hoffmann's observations are decisive of this part of the case. Conclusion . We begin with the observation that the underlying principle here is fairness. We agree with Mr Engelman that it is also inconsistency - waiving where it suits and claiming privilege where it does not - but the test for determining whether there is such inconsistency as would warrant a finding of waiver is fairness. We do not read Bennett as saying anything else, or if it does, it is only a question of emphasis. Tamberlin J rejected the notion that the underlying principle was one of fairness at large, but that is a different matter. We accept that there are passages in that judgment which indicate that the application of the fairness principle might differ in the two jurisdictions, but that is a different matter. In any event, the English authorities are, in our view, clear on the point. In our view the fundamental question is whether, in the light of what has been disclosed and the context in which disclosure has occurred, it would be unfair to allow the party making disclosure not to reveal the whole of the relevant information because it would risk the court and the other party only having a partial and potentially misleading understanding of the material. The court must not allow cherry picking, but the question is when has a cherry been relevantly placed before the court? Typically, as we have seen, the cases attempt to determine the question whether waiver has occurred by focusing on two related matters. The first is the nature of what has been revealed; is it the substance, the gist, content or merely the effect of the advice? The second is the circumstances in which it is revealed; has it been simply been referred to, used, deployed or relied upon in order to advance the party's case? As Waller LJ observed in the Dunlop case, the principles are not altogether easy to discern, partly perhaps because of the vagueness of the language adopted - for example, sometimes reliance and deployment are used as separate terms and sometimes they appear to mean much the same thing - and partly because the cases are necessarily fact sensitive. In our judgment, it is an error to treat the earlier authorities as if the words falling from judicial lips had the sanctity of statute. We would not, therefore, adopt in quite such stark terms the contents/effects distinction which Mr White submits represents the law. Plainly the fuller the information provided about the legal advice, the greater the risk that waiver will have occurred. But we do not think that the application of the waiver principle can be made to depend on a labelling exercise, particularly where the categories are so imprecise. The concepts shade into each other, and do not have the precision required to justify their employment as rigid tests for defining the scope of waiver. Having said that, we do accept that the authorities hold fast to the principle that legal advice privilege is an extremely important protection and that waiver is not easily established. In that context something more than the effect of the advice must be disclosed before any question of waiver can arise. However, in our view, the answer to the question whether waiver has occurred or not depends upon considering together both what has been disclosed, and the circumstances in which disclosure has occurred. As to the latter, the authorities in England strongly support the view that a degree of reliance is required before waiver arises, but there may be issues as to the extent of the reliance. Ultimately, there is the single composite question of whether, having regard to these considerations, fairness requires that the full advice be made available. A court might, for example, find it difficult to say what side of the contents/effect line a particular disclosure falls, but the answer to whether there has been waiver may be easier to discern if the focus is on the question whether fairness requires full disclosure. Looking at the matter in that way, we agree with the submissions of the council and the trade unions that there has been no waiver here. There was little detailed identification of the advice save with respect to the fifth reference. Even accepting that it spells out in part the substance of the advice given, we do not think that it follows that fairness requires that the whole advice be provided. In our view the authorities demonstrate that reliance is necessary and there is currently no indication that the Council has any intention of relying on the advice. The disputed material was put before the court as an exhibit to a lengthy witness statement. The legal advice has not been specifically referred to in the pleadings nor in the witness statements themselves and in our view the mere reference to the advice - even to the content of it - was not in the circumstances sufficient to constitute a waiver of privilege. The council is not seeking to rely upon the advice to justify the reason why it decided to implement pay protection for a period of four years. We should emphasise that the situation would change if the material were subsequently to be relied upon by the council. For example, if it seeks to rely upon the legal advice to support a stance that it was driven into a four year pay protection period against its will, then it would be seeking to use the advice to its advantage and we would have thought that it would be clear that waiver had occurred. However, that is not how the council is currently seeking to put its case. It is asserting that it conceded four years very much under pressure from the unions, but it is not seeking to support its position by reference to the legal advice which it obtained. We accept that there are observations in the Bennett case which support Mr Engelman's submissions as to how fairness should apply here (although we suspect that on the facts privilege would have been considered to be waived even under English law). However, we are satisfied that the case supports wider principles of waiver than would apply here. We reject Mr Engelman's wider contention that fairness requires the full substance of the advice to be disclosed because the council has demonstrated inconsistency in its position. The alleged inconsistency is the fact that the council is now in its submissions before the court departing from its legal advice. Even if that were so - and we accept Mr Reade's observation that there is nothing to show that the council is categorically flying in the face of its legal advice - it would be no more than a 'jury point' in support of the claimants' case. It should not, in our judgment, influence the Tribunal's assessment of the merits of the GMF defence at all. Mr Engelman disputes this and says that it goes to the heart of the council's case, summarised in their defence, that they have acted reasonably and justifiably in agreeing a four year protected period. He says that it is inconsistent to submit that to the court when the council has been asserting to the unions that the legal advice has been that three years is enough. However, in order for the relevant inconsistency to attract the waiver principle, it must in our view be an inconsistency in the litigation process itself. A party cannot rely on part of a privileged document and conceal the remainder; the inconsistency is being willing to waive confidentiality to the extent that it suits the party but not otherwise. There is no relevant inconsistency attracting the doctrine where the position in one case relates to negotiations with the union, and in the other, allegedly inconsistent position, is adopted in litigation with employees. Mr White makes a further submission about a factor which, he says, is an important one which should weigh in the balance when determining whether there has been waiver of privilege. He observes that this is an issue which causes the trade unions particular concern and indeed is the principal reason they have chosen to make submissions in this appeal. Their concern is that references in the collective bargaining process to legal advice might too readily be treated as constituting a waiver of privilege. He submits that on policy grounds this would be extremely unsatisfactory. Collective bargaining is conducted almost exclusively by non-lawyers and in a confidential atmosphere. It would significantly undermine the integrity of that process if casual references to legal advice - which are frequently made in that forum - were to create the risk that a party thereby might lose privilege in its legal advice. So, submits Mr White, the context in which the advice was originally created should be a factor influencing the court. Of course, no doubt in most cases such references would not be before the court and therefore no question of waiver of privilege would arise. In so far as Mr Engelman's submission about inconsistency might be seen as a basis for requiring disclosure even when no relevant material has been disclosed to the court at all - and Mr White was unsure whether this was being alleged - we reject it. In fairness, we do not think Mr Engelman was going that far. What potentially attracts the waiver doctrine is the fact that a party has chosen to rely on the legal advice to an extent which would make it unconscionable to withhold the full advice (and possibly other related documents). In those circumstances, fairness will require that a court finds that there has been waiver, whatever the original source of the material put before the court. We do have regard to Mr White's observation that in virtually all the cases the material which is alleged to have constituted a waiver of privilege has been created specifically for the litigation process. Frequently it is documents put together by lawyers. That is not the case here. However, we do not think that that fact can alter the applicable principles. We agree that the law should be careful not too readily to find that relatively casual references to legal advice in collective bargaining negotiations constitute a waiver of privilege. We doubt, however, whether that requires any departure from the established principles, nor do we see how they could sensibly be altered to accommodate this fact. In particular, if there is no reliance on these references then even if they are relatively detailed, that will still not lead to waiver of privilege. If on the other hand there is reliance, it is only fair for the full advice (at least with respect to any relevant issue disclosed) should be produced. As far as the redaction issue is concerned, we know of no principle which would say that once a document is identified at trial then it must be produced fully in un-redacted form even if there is detailed reference to legal advice. The logic of that, as Mr White pointed out, would be that if privilege is to be maintained then no information at all could be given about issues which are before the court for fear of waiving privilege. That would be detrimental to the proper conduct of a trial and, in our judgment, is not what the law requires at all. In any event, we think that the judgment of Lord Hoffmann in the Capital Finance case is decisive of this issue. That in turn was followed and applied by the Court of Appeal in the Factortame case. We do not accept that these courts were simply saying that at disclosure stage the redactions could be carried out, but that the un-redacted document would have to be provided at trial, (or presumably no documents at all). Disposal . We dismiss the appeal; there has been no waiver of privilege (at least so far) in this case. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII