Fortune Manning Clarify Legal Professional Privilege For Boards

Fortune Manning recently represented the Employer Board in an interesting case which is reproduced here:

“A recent decision of the Employment Court has clarified when a board may expect its members’ communications to be privileged in legal proceedings.   The case contains key lessons, especially where a board is using written or electronic communication to discuss an employment issue that has arisen. The plaintiff raised a personal grievance about her employment being terminated.  That personal grievance eventually led to Employment Court proceedings, in which a dispute arose before trial over whether several hundred pages of documents disclosing the Board's communications with each other and their manager should be discovered by the Trust to the plaintiff. 

“The Trust was administered by a board containing five members.  On the same day as serious employment issues arose with the plaintiff, the Board directed the Trust’s general manager to seek legal advice about those employment issues.  As a consequence, the general manager communicated with the lawyer via email about legal advice and also communicated with the Board via email about the same topic.  Different Board members also communicated with other Board members directly via email.  These communications and their attachments filled 12 folders which were the subject of a discovery application.

“The task for the Court was to determine whether the written correspondence was legally privileged.  If it was, the Trust would not be required to disclose it to the plaintiff. There are different categories of privilege.  In this case, the relevant category was “legal professional privilege”, which has two sub-categories:

•             Solicitor/client privilege, which protects communications between a lawyer and client, where the communication is intended to be confidential and is for the purpose of obtaining legal services.

•             Litigation privilege, which protects communications or information compiled for the dominant purpose of preparing for a proceeding or an apprehended proceeding.  It applies to communication between a party to the proceeding and any other person, as well as communications between the party’s lawyer and any person.

“The Court considered the different types of communication and concluded that solicitor/client privilege protected many of the documents:

•             Communications between the general manager and the lawyer: These documents were privileged because they were confidential and for the purpose of obtaining or giving legal services.  One exception was where the lawyer forwarded non-confidential documents he had received.  In that situation, the forwarded document was not privileged, but any comment by the lawyer about it was.

•             Communications between the general manager and the Board: Where a member of the Board gave instructions to the general manager about the legal advice, those communications were privileged.  Similarly, where the general manager reported back to the board about the legal advice, those communications were also privileged.

•             Communications between Board members:  These communications were privileged as long as they were for the purpose of discussing and obtaining legal services.  This was because the Board was the corporate body that was the client of the lawyer.

“In addition to these three examples of solicitor/client privilege, the Court also decided that many of the documents were created after the date that litigation was reasonably probable, so they attracted litigation privilege.   Therefore, if the document was created after that date and was prepared by the Board, the general manager or the lawyer for the purpose of preparing for that probable litigation, then it fell within this category.

“Boards of all types, such as school boards of trustees, should pay careful attention to this case.  Where an employment law issue arises and a board has instructed a lawyer, it is important to be aware that simply instructing the lawyer does not mean that any written communication from then on involving a board member (or general manager) will be privileged. 

“Whether a board has to disclose the document (i.e. whether it is “privileged”) will depend on many factors.  Those factors include the time at which the document or communication was made, who it was made by or sent from/to, and the purpose for which it came into existence.  If it turns out that a document is not privileged and contains unhelpful content, then that can cause significant problems when it is disclosed in any subsequent legal proceedings.”

For anyone who has an employment dispute that has arisen or simply want advice about best practice, please go to http://www.fortunemanning.co.nz .