Without prejudice rule immunity and later court proceedings

This brief note considers the aspect of without prejudice rule negotiations where it is said by one party to the mediation or negotiation that a preliminary phase of discussions is not related to the dispute which is later referred to a court or tribunal; that is, where mediation, conciliation or other dispute resolution did not resolve all issues. It occurs to me that this might be important with family mediation, especially where discussions with a mediator are followed by a reconciliation which later breaks down.

It is probable that in most cases, an earlier mediation would be covered by any without prejudice rule immunity (‘WPRI’) – or ‘privilege’ – arising from a later mediation, assuming that the issues for mediation in both are the same. However, the earlier discussions are not covered by WPRI then the mediator would be compellable as a witness in respect of relevant evidence and if the court is persuaded to waive confidentiality (Farm Assist Ltd v Secretary of State for the Environment, Food and Rural Affairs (No 2) [2009] EWHC 1102 (TCC), Ramsey J).

For example, supposing you were mediating following relationship breakdown. In the negotiations the husband’s parents joined in to discuss how the couple’s house had been acquired (with money from the parents). The couple become reconciled. Four years later they are back seeing the same mediator. This time their parents are not there.

(1)   To what extent are admissions made by the parents in the first mediation admissible in court if the second mediation breaks down; or if the couple, four years later, issue proceedings immediately without coming back to you as mediator?

(2)   Would your answer differ if the husband becomes bankrupt at the same time as the separation?

(3)   What would your view be if you understood the parents to be making admissions as part of their concern to keep the couple together?

(4)   How would you suggest the parents deal with things if they come back to see you, where the couple have gone straight to lawyers and started proceedings?

In Portnykh v Nomura International plc [2013] UKEAT 0448-13-0511, HHJ Hand QC (sitting alone) http://www.bailii.org/uk/cases/UKEAT/2013/0448_13_0511.html provides a first class modern summary of without prejudice rule immunity and how it operates in connection with negotiations. He looks at the question in a carefully argued judgement, and especially where it is said by one party that the particular negotiations – in relation to redundancy, where a former employee made concessions in relation to his employment – are not in connection with a dispute or ‘potential dispute’ (as was said in Framlington Group Ltd & Anor v Barnetson [2007] EWCA Civ 502: redundancy negotiations not part of dispute which resulted in subsequent litigation).

In Potnykh the EAT held that the redundancy negotiations were part of a continuum which included the later tribunal proceedings, Therefore the earlier redundancy negotiations, including email correspondence and admissions made in the course of them, were privileged from production in the later tribunal hearing.

A subsidiary issue which arose in Portnykh, but was not determinative of the immunity, related to the ‘unambiguous impropriety’ exemption (see the list of exemptions in Unilever plc v The Procter & Gamble Co [2000] 1 WLR 2436 (set out in DR Law Guide, 1st Ed)): that the without prejudice rule cannot be used to hide impropriety or eg later failure to disclose admitted and material information in later proceedings (where settlement is not achieved).

Portnykh (even if you can remember how to spell it) will not answer the questions posed above; but, I believe, it may give a good insight into the need to be clear on a number of points including:

(1)   Where, in law (as an EAT appeal this had to turn on a point of law: Tribunals, Courts and Enforcement Act 2007 s 11), negotiations are – or are not – intended to settle an incipient dispute if, later, a mediator is asked to provide evidence about negotiations

(2)   Where a party seeks to use WPRI to hide real dishonesty (eg material non-disclosure), and a mediator is summonsed to give evidence as to that impropriety.

Protnykh will be considered further in context in the DR Law Guide (2nd Edition in preparation).




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