How can Claimants challenge heavily redacted documents during disclosure?

At Farore Law, we regularly represent senior executives in employment disputes against investment banks, hedge funds, private equity firms and other finance houses in the City. Litigating against these firms often poses challenges during the disclosure process, where Respondents ordinarily disclose documents in a piecemeal or cherrypicked manner.

In our experience, Respondents/Defendants tend to heavily redact documents for reasons often unrelated to legal professional privilege. For example, we have dealt with litigation during which Respondents have disclosed heavily redacted documents on grounds of confidentiality or irrelevance.

In these types of cases, the principles set out in Part 31 of the Civil Procedure Rules (“CPR”) are important. Note the Employment Tribunal has the same powers to order disclosure and provision of information as the civil courts do in Parts 18 and 31 of the CPR.

Below we set out how a Claimant should challenge redactions made on the following categories: (1) legal professional privilege; (2) confidentiality; and (3) relevance.

Legal professional privilege

Under the CPR, the party’s solicitor is expected to explain in the disclosure list what documents they are withholding from inspection and the grounds for doing so. For example, if a party is claiming privilege, they should explain the basis in which they are claiming privilege (without enabling the other party to learn the contents of the documents), e.g. advice or litigation privilege. Where there is disagreement, there may be an application to the court to determine whether a party is entitled to withhold inspection on that basis. In practice, an affidavit from the solicitor will be conclusive, unless if the court is reasonably certain that the affidavit does not make out a satisfactory case for withholding a document.

If the court concludes that the affidavit does not make out a satisfactory case for claiming privilege, the court may:

• Order another affidavit to deal with elements of the first that rendered it unsatisfactory;
• Inspect the documents itself; or
• Order cross-examination of the solicitor.

Ordinarily, the court will not order inspection of documents purportedly covered by privilege unless if there is credible evidence that the lawyers have misunderstood their own duty or are not to be trusted. This is only ordered where there is no reasonably practical alternative.

Confidentiality

The starting point is that a court or Tribunal has the power to override confidentiality and order inspection of confidential documents if it is necessary for the fair disposal of proceedings.

Where redactions are applied on grounds of confidentiality and the other side challenges it, the court or Tribunal may order counsel-to-counsel disclosure, where both parties’ counsel meet and inspect the unredacted copies of the documents to agree whether redactions are appropriate. Ordinarily, this is subject to an undertaking that opposing counsel does not disclose those documents to their client (which may give rise to considerable difficulties since counsel will need to take instructions).

Copies of the unredacted documents may also be sent to the court or Tribunal, alongside proposals for redactions by both parties.

The EAT held in Frewer v Google UK Limited [2022] EAT 34 that “if [a] material is likely to support or be adverse to a party’s case and is necessary for the fair disposal of the proceedings it should be disclosed, and cannot be redacted merely on the basis that it is confidential. Any order for redaction on grounds of confidentiality must be made only where necessary on an application supported by evidence having full regard to the open justice principle, usually pursuant Rule 50 ET Rules”.

In exceptional circumstances, a private hearing may be ordered as a means of preserving confidentiality. However, courts and Tribunals have to give full weight to the principle of open justice before ordering a private hearing. Open justice should only be derogated in these circumstances if the party seeking secrecy or privacy satisfies the court that by nothing short of the exclusion of the public can justice be done. Where a court or Tribunal orders a private hearing, the order must be limited in scope to what is required in the particular circumstances of the case.

Examples of where a private hearing has been ordered include cases where publicity would damage confidentiality, such as where an employer enforces a restrictive covenant to protect its trade secrets.

Relevance redactions

The general approach under both the CPR and the Employment Tribunals with redactions on the ground of relevance is that a litigant giving disclosure of documents is entitled to redact parts of a document which are irrelevant and, in most cases, a certificate to that effect by the party’s solicitor will be treated as conclusive; see Frewer at paragraph 24.

The Disclosure Pilot for the Business and Property Courts (Practice Direction 51U of the CPR) (“the Disclosure Pilot”) contains an express provision on how parties should approach redactions which are applied on grounds of confidentiality or irrelevance. Paragraph 16.2 of the Disclosure Pilot states that any redaction “must be accompanied by an explanation of the basis on which it has been undertaken and confirmation, where a legal representative has conduct of litigation for the redacting party, that the redaction has been reviewed by a legal representative with control of the disclosure process”. Significantly, the Disclosure Pilot states that redactions cannot be applied solely on grounds of confidentiality. The confidential material in question needs to also be irrelevant.

Although the Disclosure Pilot only applies to cases in the Business and Property Courts, other courts or Tribunals regard the approach at paragraph 16.2 of the Disclosure Pilot to be helpful. For example, the Employment Appeal Tribunal in Frewer took into account paragraph 16.2 of the Disclosure Pilot when dealing with how Tribunals should deal with documents redacted on grounds of relevance.

We think it is likely that courts and Tribunals will begin to adopt the approach set out in the Disclosure Pilot when dealing with redactions on grounds of relevance, particularly where the court or Tribunal is dealing with heavily redacted documents.

It should also be noted that shareholder disputes are litigated in the Business and Property Courts, some of which have an employment law aspect to it. For example, a company director may be both an employee and shareholder of a company and may bring an unfair prejudice petition where an employment dispute affects their shareholding. An example of this might be cases where a director is dismissed from gross misconduct and labelled a Bad Leaver under a company’s vesting schedule, for example.

As experienced litigators, we robustly challenge Respondents/Defendants in the disclosure process through specific disclosure requests and applications to the Tribunal/court, including challenging redactions where necessary. Successfully obtaining specific disclosure or challenging redactions can often strengthens our client’s case and may facilitate settlement if the disclosure obtained damages the other side’s case.

For example, we have recently persuaded an Employment Tribunal to order a finance house to produce a statement summarising why they have applied redactions on grounds of irrelevance in respect of many documents in their disclosure list, which will enable us to be in a better position to challenge redactions.

How may we help?

Our extensive expertise as employment lawyers means we are very well placed in advising senior executives on how to best navigate complex litigation, including during the disclosure process.

Please contact us if you require legal advice.