The Shawcross Redemption That Wasn’t: The Iniquity Exception Falls Short in Shawcross v SMG Europe Holdings [2025]

Legal advice privilege protects confidential communications between a lawyer and their client as long as they’re for the main purpose of giving or receiving legal advice. But there’s a limit. If those communications are created to help commit a fraud, crime, or some other serious wrongdoing, privilege doesn’t apply. This is called the “iniquity exception” and it stops privilege being used as a shield for misconduct.

In this blog, we look at the recent EAT decision Shawcross v SMG Europe Holdings Ltd & Ors [2025] EAT 92 and whether the iniquity exception could apply to email correspondence between a lawyer and their client.  

The Legal Test

The Court of Appeal in Al Sadeq v Dechert LLP [2024] confirmed that, for the iniquity exception to apply, the person arguing for it must show two things:

• It’s more likely than not that the wrongdoing actually happened; and
• The communication was created to help carry it out.

This isn’t an easy hurdle to clear and a recent employment law case shows why.

Shawcross v SMG Europe Holdings Ltd & Ors [2025]

Two days before her dismissal, Ms Shawcross was accidentally copied into an email chain between her employer and their solicitor. The chain consisted of seven emails. The emails discussed the process around her dismissal.

The EAT judge highlights the following notable points about the emails:

• It is clear that the employer’s solicitor offered advice as to the risk of an immediate dismissal of Ms Shawcross being found to be unfair and as to steps that could be taken to mitigate that risk. 
• The employer’s solicitor identified and warned of a particular risk that Ms Shawcross might seek to argue that dismissal was an act of victimisation, but he did not suggest that such a complaint would be well-founded.
• There is no mention anywhere in the chain of the grievances raised by Ms Shawcross forming any part of the respondent’s reason for the decision to dismiss.
• The only express reference by anyone to a reason for dismissal is in the employer’s solicitor’s email in relation to the draft dismissal letter prepared by him and sent on the same day. 
• Read as a whole, a fair interpretation of the advice given by the employer’s solicitor was that he recommended a review of the position that had been reached by three days before Ms Shawcross’s dismissal by a member of senior management of the employer in the expectation that such a manager would need to be able to justify “his decision” to dismiss before a tribunal. 
• In the employer’s email to her solicitor two days before Ms Shawcross’s dismissal, the employer identified a member of senior management as the decision maker without any suggestion that his involvement was merely a sham.

Ms Shawcross said these emails fell under the iniquity exception because they revealed a sham process – that the real decision to dismiss had already been made, and the employer was hiding the identity of the person who made it. 

The employer argued the emails were covered by privilege.

What the Tribunal Decided

The Employment Tribunal found the iniquity exception didn’t apply, and the Employment Appeal Tribunal agreed.

Why?

• Objectively, and read a whole, the emails were not about fabricating evidence or covering up misconduct.
• The solicitor’s advice was the sort of frank and practical advice employment lawyers give all the time.
• Indication that a decision had already been taken by someone within the respondent’s organisation as to Ms Shawcross’s future employment is the sort of candid instruction that a party is able to give in privileged communication: Abbeyfield (Maidenhead) Society v Hart [2021]. 
• Even if dismissal seemed almost certain, the suggestion to bring in a senior manager as “a fresh pair of eyes” was about following a fairer process, not running a sham.

As a result of this decision, Ms Shawcross will not be permitted to rely on the email chain at the full merits hearing of her claim.

Why This Matters

The decision is a reminder that:

• Honest, candid discussions about the likelihood of dismissal can still be privileged.
• The iniquity exception only kicks in if there’s clear, objective evidence of real impropriety – not just unfairness or strong views.
• Employees should take advice if they suspect the process against them isn’t genuine.
• The iniquity exception is hard to prove but can be powerful in the right circumstances.

How Farore Law can help

While Ms Shawcross didn’t succeed, we’ve acted in cases where we’ve proved that privilege was being used to hide threats or improper behaviour. In those cases, we have successfully had the privilege label removed so that our clients were able to rely on the underlying documents. 

If you’ve been given legal threats at work or suspect impropriety, our team at Farore Law can help challenge misuse of privilege.

Please contact us for legal advice.