Employee could not assert privilege against employer over documents on employer's IT system

The High Court has found that a company's Group Finance Director could not assert privilege against the company in respect of documents he had created for the purpose of obtaining legal advice in respect of his divorce proceedings, which the company had found on its computer systems. The documents were not confidential as against the company, as the claimant did not have a reasonable expectation of privacy in respect of the documents: Simpkin v The Berkeley Group Holdings PLC [2017] EWHC 1472 (QB).

The decision suggests that where documents are created and/or stored on an employer's IT systems, and subject to its IT policy, the employee may not be able to assert privilege as against the employer in respect of those documents. The court distinguished a similar High Court decision, Shepherd v Fox Williams [2014] EWHC 1224 (QB), as in that case the privilege belonged to a third party (the employee's girlfriend) who was not subject to the employer's IT policy.  

In the present decision the court notes that the relevant documents were not password protected or segregated from the claimant's work related documents, and did not indicate on their face that they were privileged. It is not clear whether the decision would have been different had such factors been present. 

The decision illustrates that employees who create or store documents on IT systems controlled by their employer may not be able to assert privilege against that employer. Employers should not however assume that they will always be entitled to use such material - as noted above, the position may be different if steps are taken to indicate that the documents are confidential to the employee, for example if they are password protected or stored in a private folder separate from the employee's work documents.

The decision also contains interesting comments on when the court will exercise its discretion to restrain an opponent from using confidential and privileged documents which have come into its hands, and on the dangers of referring to privileged documents even for the purpose of supporting a claim to privilege.

Background

The defendant terminated the claimant's employment as its Group Finance Director and removed him as a director. It decided that he would not be treated as a "good leaver" so as to benefit from two long term incentive plans and a bonus scheme operated by the defendant, and the claimant brought proceedings.

In the course of the proceedings the defendant served witness statements which referred to two documents the claimant maintained were private, confidential and privileged. The claimant sought an order striking out the relevant parts of the witness statements and an order that the documents should not be relied upon further.

The documents were a copy of an email from the claimant's work email account (at the defendant's offices) to his private email account. The email itself had no content other than a footer which stated that the email including attachments was "confidential, may be covered by legal professional privilege and is intended for the addressee only". The second document was the attachment to that email, referred to as the "Synopsis", which the claimant said had been prepared in order to take legal advice from his solicitor in connection with his divorce proceedings, and had been forwarded to his personal email account to on-send to his solicitor from that account.

The defendant contended that the claimant was not entitled to claim privilege in the Synopsis. It argued that when a privileged document has come into the hands of an opposing party in litigation there is nothing, as a matter of the laws of evidence, that prevents that party using the document or adducing secondary evidence of its contents. It acknowledged that the court has power to restrain such use under its equitable jurisdiction to restrain a breach of confidence, but argued that the claimant should not succeed in his application to restrain the use of the Synopsis because:

1. The Synopsis was not confidential vis-à-vis the defendant;
2. The claimant had not sufficiently made out its case that the Synopsis was prepared and communicated in circumstances giving rise to privilege;
3. The court should not in any event exercise its discretion in the claimant's favour because, if it did so, there was a significant risk that the court would be misled as to the claimant's genuine expectations under the schemes.

The defendant also sought an order under CPR 31.14 for inspection of two other emails sent by the claimant, on the basis that (i) those emails might support or undermine the claimant's assertion of privilege in the Synopsis and (ii) the claimant had waived privilege in those emails by deploying and relying on their contents to support the claim to privilege. 

Decision

The High Court (Mr Justice Garnham) refused the claimant's application to restrain use of the Synopsis on the first and third grounds. In relation to the defendant's application to inspect the other two emails sent by the claimant, if it had been necessary to determine it, the court would have found that privilege had been waived in one email but not the other.

No reasonable expectation of privacy

It was common ground between the parties that confidentiality is a pre-condition to a claim to privilege. The judge agreed with the defendant that a reasonable expectation of privacy is the "touchstone" of confidentiality. He found the Synopsis was never confidential as against the defendant or, if it was, it lost its confidentiality when it was processed on the defendant's IT system.

1. The claimant signed a copy of the defendant's IT policy which made clear that emails sent and received on its IT system were the property of the defendant, and the claimant's employment contract made it clear that his emails were subject to monitoring by the defendant without his consent.
2. The Synopsis was created in the course of the claimant's employment. It contained an analysis of the defendant's financial performance by its group finance director. It was prepared while working at the defendant's offices and was created on, and transmitted via, its IT system.
3. The claimant saved the Synopsis to his folder on the defendant's central servers; it was not password protected and was not segregated from the claimant's work related documents. Further, the claimant's email folder was accessible by the claimant's personal assistant; the judge said this undermined the suggestion that the claimant had a reasonable expectation of privacy as against the defendant, even if the assistant did not in fact have occasion to look at the emails. Neither the Synopsis nor the covering email indicated on their face that they were privileged; the fact that the email contained an automatic footer referring to confidentiality and privilege did not assist the claimant, as its purpose was to protect the defendant's confidentiality, not to protect its employees' confidentiality against the defendant.
4. The claimant's own witness statement showed that he was well aware that he was not entitled to privacy in using the defendant's IT systems, as he said he had sent a previous email from his personal email address to the same email address "because although I required a copy to be stored the content was confidential and for my lawyer and I did not want to save a copy on my work computer".

The court distinguished a previous case, Shepherd v Fox Williams, on which the claimant sought to rely. In that case Simler J found that the defendant was not entitled to use the claimant's privileged documents which were stored on the defendant's email servers. The claimant had sent the documents to his girlfriend (a former employee of the defendant) and she had forwarded them to her work address and opened them on her work computer, which meant they were stored on her employer's (the defendant's) systems. The court found that the claimant's confidentiality, and therefore privilege, had not been lost. In Shepherd, Simler J held that the defendant's electronic information policy did not assist the defendant in its claim to be entitled to use the documents. In a passage quoted by Garnham J in Simpkin, he said:

"There is no evidence that the claimant had notice or knowledge of the policy relied on by [the defendant]. He is not and has never been employed by [the defendant]. ... It is not obvious to me that a fair reading of the policy would have led the claimant to conclude that privilege and confidentiality in documents, sent to his girlfriend's personal email but forwarded to her work email address for a limited purpose, would be invaded and jeopardised as a consequence. The fact that [the girlfriend] personally might not be able to assert rights of privacy against [the defendant] does not mean that the claimant cannot assert rights to confidentiality and privilege in respect of the Privileged Documents against [the defendant]. Confidentiality is not lost simply because [the girlfriend] forwarded the documents to her work email." (Garnham J's emphasis)

Garnham J noted that, although the underlined passage was obiter, it made clear that Simler J doubted that an employee who was subject to the employer's electronic information policy (as the claimant was in the present case) would have been able to assert privilege.

Discretion to restrain breach of confidence

Although the judge's decision that there was no confidentiality in the Synopsis was sufficient to dispose of the claimant's application, he also indicated his reasons for concluding that he would not in any event have exercised his discretion to restrain use of the Synopsis.

The judge referred to a number of principles set out in ISTIL Group Inc v Zahoor [2003] EWHC 165 (Ch), which was cited with approval by the Court of Appeal in Imerman v Tchenguiz [2010] EWCA Civ 908). These include that once a privileged document is disclosed, the question is one of admissibility, not privilege. Since the court is exercising an equitable jurisdiction to restrain a breach of confidence, the normal rules relating to the grant of equitable remedies apply, including the "clean hands" principle. Further, confidentiality is subject to the public interest. Although it is well established that the emergence of the truth is not of itself a sufficient public interest to outweigh the protection of privilege, other public interest factors may still apply. So the court can apply the rule that it will not restrain publication of material in relation to misconduct which ought in the public interest to be disclosed to others.

Here, the judge noted that there was a stark conflict between the account put forward in the claimant's witness statements and that set out in the Synopsis, and the claimant was seeking to avoid those inconsistencies being revealed to the court. The judge added:

"The claimant's lack of "clean hands" in this regard is directly connected with the equitable remedy which he seeks. Had I concluded that the Synopsis was confidential and privileged as against the defendant, I would have exercised my discretion to refuse the relief the claimant claims."

Waiver of privilege due to claimant's application

CPR 31.14 provides that a party may inspect a document mentioned in a witness statement (among other things). However, that does not itself override a party's right to privilege in respect of a document so mentioned. The question is whether a party is "deploying", or relying on, the contents of the document, rather than its existence and effect.

The claimant argued that he did not rely on the contents of the emails but merely mentioned them as part of the narrative explaining why the Synopsis was privileged. The claimant's witness statement said:

"At 6.21pm on 6 August 2014 I sent an email from my personal email account to the same personal email account with a draft of the document that became [the Synopsis]. I sent this email to myself because although I required a copy to be stored, the content was confidential and for my lawyer and I did not want to save a copy on my work computer. Using my personal email account in this way allowed me to store a copy of the document, albeit not in a Word formatted document.

Immediately prior to 7.10am on 11 August 2014 I copied the contents of the email dated 6 August 2014 from my personal email account into a Microsoft Word document so that it was formatted as [the Synopsis] to make it easier for my lawyer to read the document."

The judge found that, in these passages, the claimant was deploying the content of the 6 August email; he was telling the court that the content of that email was the Synopsis and all he had done was to re-format it. He was describing the contents of the email in order to make good his case that he did not work on it at the defendant's premises. He had therefore waived privilege in that email. 

The judge reached the opposite conclusion on the email of 11 August 2014, as the claimant had simply referred to the document as part of the narrative. It had not been deployed and so there was no waiver of privilege.