Without prejudice rule immunity – unrevised

1        INTRODUCTION

Negotiation immunity

  • Without prejudice rule immunity is more generally known as without prejudice privilege. This book will avoid the term ‘privilege’, because privilege is generally reserved for confidential information which is specific to an individual person (and perhaps their representatives); whereas the ‘privilege’ which arises from the without prejudice rule is shared by the parties to the case (at least two people), perhaps one or more mediators, legal representatives and so on. It can be described as ‘privilege’ only to the extent that where the rule applies the content of negotiations and documents arising from them are excluded by operation of the rule from production in court at trial of a case.
  • By definition without prejudice immunity does not protect confidences as between the parties. It enables them by their implied agreement, to exclude certain information from the court.[1] This was explained by Jacobs LJ in Reed Executive plc and another v Reed Business Information Ltd and others [2004] EWCA (Civ) 887, [2004] 1 W.L.R. 3026:

[19] [It is submitted] that the exclusion of “without prejudice” negotiations is a rule of evidence not a privilege, relying on Rush & Tompkins Ltd v Greater London Council [1989] AC 1280. That case was not actually concerned with the difference. Nor, as I see, does it matter what label is attached to it. It is a rule of law. Normally “privilege” attaches to the rights of a single party, for instance a party has, and can waive, legal professional privilege. The detail of “without prejudice” negotiations has some analogy, the difference being that it is admissible if both parties “waive” their rights to non-disclosure….

Terminology

  • Mediation as a subject has developed a varied, and sometimes confusing, terminology. ‘Conciliation’,[2] the original term for the subject, was derived largely from the use of the word in the Finer report (Report of the Committee on One-Parent FamiliesJuly 1974 Cmnd 5629, Sir Morris Finer at (paras 4.85-4.90)). One of the earliest cases on mediation was Re D (Minors)(Conciliation: Privilege).[3] This word was thought too close to the word ‘reconciliation’. The term mediation tended to be used as time went on.
  • ‘Mediation’ is now subsumed in many instances by the term ‘alternative dispute resolution’; or the negative (and therefore uninformative) ‘non-court dispute resolution’ (Family Procedure Rules 2010 Part 3[4]. Meanwhile, ‘dispute resolution’ has now been adopted as another word – some might say a euphemism – for the civil litigation process. ‘Additional’ is a word used by Lord Bingham in the mediation context (‘additional dispute resolution’).[5]

2        WITHOUT PREJUDICE RULE

Use of the words ‘without prejudice’: rebuttable presumption as to privilege

  • Without prejudice immunity depends on the existence of genuine settlement negotiations: privilege will then attach to documents arising from those negotiations. Use of words such as ‘without prejudice’ on correspondence or at the outset of a meeting does not dictate whether a document or meeting is covered by the rule. Lord Hope explained this in Ofulue v Bossert:[6]

[2] Sometimes letters get headed ‘without privilege’ in the most absurd circumstances, as Ormrod J observed in Tomlin v Standard Telephones & Cables Ltd [1969] 1 WLR 1378, 1384. But where the letters are not headed ‘without prejudice’ unnecessarily or meaninglessly, as he went on to say at p 1385, the court should be very slow to lift the umbrella unless the case for doing so is absolutely plain…. Where a letter is written ‘without prejudice’ during negotiations with a view to a compromise, the protection that these words claim will be given to it unless the other party can show that there is a good reason for not doing so.

  • It is the circumstances and the intent of any meetings or the content of relevant correspondence which will dictate the immunity; not whether or not such words as ‘without prejudice’ or ‘off the record’ are used in some form. Are the negotiations part of a genuine attempt to settle anticipated court proceedings (considered further below)?
  • That said, the use of ‘without prejudice’ by the parties to a negotiation suggest that they intend that privilege should apply to their discussions. In Williams v Hull[7] Arnold J concluded, echoing the comments of Ormrod J and Lord Hope above, that if a letter is in fact headed ‘without prejudice’ there is a rebuttable presumption that it will be treated as being covered by the without prejudice rule:[8]

[18] It is well established that a communication which is not expressed to be “without prejudice” may nevertheless be protected by the rule, and that a communication which is expressed to be “without prejudice” may nevertheless not be protected by the rule. In South Shropshire District Council v Amos [1986] 1 WLR 1271 at 1277 Parker LJ said that, where a letter was marked ‘without prejudice’: ‘This prima facie means that it was intended to be a negotiating document.’… Nevertheless, I think it is correct to say that, if a letter is expressly stated to be ‘without prejudice’, that gives rise to a rebuttable presumption that the communication is a without prejudice communication within the meaning of the rule unless it is clear that the expression has been used with some other meaning or purpose.

Definition: privilege for admissions in negotiations

  • The without prejudice rule entitles a party not to produce in evidence to the court details of negotiations in relation to litigation, or anticipated litigation. It protects statements or offers made in the course of negotiations for settlement of a case from being put before the court as admissions against interest.
  • The general rule as to admissions is not only that they bind the maker of the admission; but they relieve the party who relies on the admission from further proof if the admission is of evidence relevant to the issue in a case. Contents of pleadings and court statements (eg of assets and other facts relevant to a case) are easy examples. Admissions may be made by parties or their representative in correspondence. These admissions can be relied on at trial.
  • By contrast where the without prejudice rule applies neither party can rely on admissions made by the other whilst the immunity covers them. This was explained by Lord Clarke (with whom the other law lords agreed) in the Supreme Court in Oceanbulk Shipping & Trading SA v TMT Asia Ltd and ors) [2010] UKSC 44 (‘Oceanbulk’) as follows:

[19] The approach to without prejudice negotiations and their effect has undergone significant development over the years. Thus the without prejudice principle, or, as it is usually called, the without prejudice rule, initially focused on the case where the negotiations between two parties were regarded as without prejudice to the position of each of the parties in the event that the negotiations failed. The essential purpose of the original rule was that, if the negotiations failed and the dispute proceeded, neither party should be able to rely upon admissions made by the other in the course of the negotiations. The underlying rationale of the rule was that the parties would be more likely to speak frankly if nothing they said could subsequently be relied upon and that, as a result, they would be more likely to settle their dispute.

  • Lord Clarke then referred to a variety of case law which had developed and understanding of the rule, each of which will be considered below:

[21] It is now well settled that the rule is not limited to such a case. This can be seen from a series of decisions in recent years, including most clearly from Cutts v Head [1984] Ch 920, Oliver J, Rush & Tompkins Ltd v Greater London Council [1989] AC 1280, Muller v Linsley & Mortimer [1996] PNLR 74, Unilever plc v The Procter & Gamble Co [2000] 1 WLR 2436 and most recently Ofulue v Bossert [2009] UKHL 16, [2009] AC 990.

(1)       The public policy element

  • What is regarded as the public policy element to the without prejudice rule is to encourage parties to speak frankly in the hopes that they will settle their litigation. This was explained by Lord Griffiths in Rush & Tomkins Ltd v Greater London Council [1989] 1 AC 1280:

[23] …The ‘without prejudice’ rule is a rule governing the admissibility of evidence and is founded upon the public policy of encouraging litigants to settle their differences rather than litigate them to a finish. It is nowhere more clearly expressed than in the judgment of Oliver LJ in Cutts v Head Cutts v Head [(above) at] 306:

That the rule rests, at least in part, upon public policy:… that parties should be encouraged so far as possible to settle their disputes without resort to litigation and should not be discouraged by the knowledge that anything that is said in the course of such negotiations (and that includes, of course, as much the failure to reply to an offer as an actual reply) may be used to their prejudice in the course of the proceedings. They should, as it was expressed by Clauson J in Scott Paper Co v Drayton Paper Works Ltd (1927) 44 RPC 151, 156, be encouraged fully and frankly to put their cards on the table. … The public policy justification, in truth, essentially rests on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of liability…

(2)        Contractual element

  • The contractual basis of the without prejudice rule rests on the express or implied agreement of the parties themselves that communications in the course of their negotiations should not be admissible in evidence if, despite their negotiations, a contested hearing ensues. In Unilever plc v The Procter & Gamble Co [2000] 1 WLR 2436 (at 2442) Robert Walker LJ considered the general incidents of application of the rule, first as to public policy (above) and then by reference to its contractual qualities, as follows:

Its other basis or foundation is in the express or implied agreement of the parties themselves that communications in the course of their negotiations should not be admissible in evidence if, despite the negotiations, a contested hearing ensues.

  • The agreement may be waived by the parties (whether expressly or impliedly); but waiver can only be by both or all of the parties jointly (any mediator’s assent is not needed[9]). In the case of Calderbank correspondence (Calderbank v Calderbank[10]) the express waiver by one party is accepted as part of an implied term which is treated by both as excluding the immunity; but solely where the court may be asked to adjudicate on the specific question of costs.

Privilege: a fair trial and onus of proof

  • However, as with any form of privilege or confidentiality, if it is upheld, a successful claim deprives the court of relevant evidence and thus is in conflict with a party’s right to a fair trial.[11] In all other circumstances an admission openly made as between the parties will bind the party who makes it.
  • As with other forms of privilege the onus of proof of application of the without prejudice rule in each case – whether of privilege or confidentiality – will be upon the person asserting the immunity. Lord Edmond-Davies put the point in Waugh v British Railways Board [12] as follows: ‘It is for the party refusing disclosure to establish his right to refuse’. The general rule – as ever – is that all material evidence should be available for inspection.

 

3        LITIGATION IN PROSPECT

Court proceedings, or ‘a real dispute capable of settlement’

  • The without prejudice rule attaches only where there are court proceedings in existence, or there must be ‘a real dispute capable of settlement’. The principle that there must be a dispute and an attempt to resolve it was explained by Lord Mance in Bradford & Bingley Plc v Rashid[13] as follows:

[81] …The existence of a dispute and of an attempt to compromise it are at the heart of the rule whereby evidence may be excluded (or disclosure of material precluded) as ‘without prejudice’. This is clear from the passage … from Lord Griffiths’ speech in Rush & Tompkins Ltd v Greater London Council [(above) and there quoted in full]: ….The rule does not of course depend upon disputants already being engaged in litigation. But there must as a matter of law be a real dispute capable of settlement in the sense of compromise….

  • In what circumstances can it be said that proceedings are genuinely anticipated? When can it be said that there is a ‘real dispute capable of settlement’ and therefore of engaging the rule? Sometimes this will be obvious. Two people who have hitherto lived together as a couple in a more or less harmonious relationship, do not normally meet and discuss their future financial arrangements with a mediator unless at that stage one or both of them think their relationship or marriage is at an end. It can be assumed, unless the contrary is proved, that there is between them a dispute which needs resolving, and which is capable of settlement.
  • By contrast, another couple, who are still together, discuss the value of their house in circumstances where it is agreed between them that it will be sold. Figures and other terms for the sale are agreed, and an estate agent is instructed. Later, but before the house has been sold, the same couple become involved in matrimonial proceedings which also concern the property. The question may then arise as to whether discussions about the original sale are covered by the without prejudice rule. Answers to this question and that in the previous paragraph will be considered at 4.## below.

Litigation: how proximate?

  • In most cases it will be relatively clear whether litigation is in prospect: for example, where a couple separate and go to mediation to discuss settlement. By contrast, there may be many commercial arrangements which involve relatively bruising negotiations but where litigation is not necessarily in prospect. This question arose in Framlington Group Ltd & Anor v Barnetson.[14] Mr Barnetson (B) claimed damages against Framlington for wrongful dismissal from its employment as its chief operating officer and for other alleged breaches of his contract of employment. Information as to the course of negotiations which preceded and followed the dismissal was detailed in B’s statement in later court proceedings arising from the parties’ dispute. Framlington sought to have this information excluded so far as it contained details of the parties’ negotiations.
  • The outcome of the negotiations, as Auld LJ held, was that the truth of the parties’ positions was that ‘they were already well and truly at odds as to [Mr Barnetson’s] contractual entitlement’. What followed ‘amounted to wrangling over the terms of that entitlement, not discussions as to variation of them’ as the judge below had found. The Court of Appeal was therefore confronted by:

[38] …negotiations arising out of a dispute as to Mr Barnetson’s contractual entitlement on his early dismissal, all against the backcloth of potential litigation if they could not resolve the dispute by compromise.

‘Contemplation of litigation’

  • Auld LJ looked at the question which the court must ask as: ‘how proximate, if at all, must unsuccessful negotiations in a dispute leading to litigation be to the start of that litigation, to attract the “without prejudice” rule’ (para [32])? This was a factor; but proximity must also depend on the nature and subject matter of the dispute, he said:

[34] The critical feature of proximity for this purpose, it seems to me, is one of the subject matter of the dispute rather than how long before the threat, or start, of litigation it was aired in negotiations between the parties. Would they have respectively lowered their guards at that time and in the circumstances if they had not thought or hoped or contemplated that, by doing so, they could avoid the need to go to court over the very same dispute? On that approach, which I would commend, the crucial consideration would be whether in the course of negotiations the parties contemplated or might reasonably have contemplated litigation if they could not agree.

  • In Portnykh v Nomura International plc [15] considers the proximity argument where it was said by one party that the particular negotiations – where a former employee made concessions in relation to his employment in redundancy negotiations – are not in connection with a dispute or ‘potential dispute’. The judge 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 immune from production in the later tribunal hearing. They could not be relied upon in any way by Dr Portnykh’s former employers.

Family proceedings

  • The two examples at 4.## and 4.##, considered in the light of what Auld LJ says on the subjects of proximity and contemplation of proceedings in Framlingham, can be answered as follows:
  • If the first relationship later fails – perhaps four or five years (or more) after the mediation, the discussions would remain confidential, and almost certainly covered by privilege, on the ground that the parties would only have gone to mediation because they thought their relationship was at an end. They would come within Auld LJ’s comment: that the crucial consideration would be whether in the course of negotiations the parties ‘contemplated or might reasonably have contemplated litigation if they could not agree’ (para [34]).
  • If the second relationship fails, both parties would be entitled to say that litigation was not in prospect when they agreed the sale of their house, and the conditions on which it should be sold. On this basis, and if the sale arrangements were relevant to an issue before the court, evidence as to the detail of their negotiations would be admissible in subsequent financial order proceedings.

4        PROCEDURE FOR DISCLOSURE AND AGREEMENTS

Disclosure under the rules

  • The fact of a party believing that documents are covered by the without prejudice rule does not exempt that party from disclosure (in the sense that a party ‘discloses a document by stating that a document existed’: CPR 1998 r 31.2, FPR 2010 r 21.1(1)[16]); though most of the documents and information (content of discussions etc) will, by definition, be common to both parties to proceedings. (Different rules apply where a stranger to the original proceedings applies to override the confidentiality in without prejudice documents: see discussion of Muller v Linsey (below)[17]). Without prejudice rule documents will be immune from production unless the court orders production (eg because one party persuades the court that an exception to the rule applies[18]); or it is held that privilege does not in any event apply.

Agreements in without prejudice correspondence

  • If a party wishes to allege that there is an agreement between him/her and the respondent, the general rule of pleading (summarised in CPR 1998 PD16A paras 7.3 to 7.5[19]) is that the agreement must be specifically pleaded. The person who asserts the agreement must set out its terms in court documents. This gives rise to tow issues for disposal by the court and depending on whether correspondence is said by one party to be covered by without prejudice immunity:
  • If all the correspondence the court will be confronted with a construction issue: does the correspondence and other dealings amount to a contract?[20]
  • If correspondence is all covered by the without prejudice rule immunity, has agreement been reached so that the rule no longer applies.[21]
  • Where it is said that the agreement derives from without prejudice correspondence the party alleging the agreement will want to produce the material, marked without prejudice’ in court. The documentary evidence is likely to take one of two forms (particular rules apply in matrimonial and children proceedings which are dealt with separately[22]):
  • The agreement will have been reached in the course of pre-issue discussions, and will therefore take the form of a construction issue (CPR 1998 Part 8) where the court is asked to construe whether there is an agreement between the parties on the basis of the correspondence disclosed.
  • The agreement will have been reached in the course of issued proceedings. The application for a finding as to whether there is a concluded agreement will therefore be interim to those proceedings (CPR 1998 Part 23). Particular care will need to be exercised with the court administration, since if the application fails documents still covered by privilege will need to be removed from the court file.
  • The principles in relation to what follows apply whether the agreement is reached between the parties alone (subject to any difficulties there may be in actually defining – construction of terms – what was agreed), in solicitors’ correspondence or following mediation or other dispute resolution. As will be seen[23] a mediator, and perhaps a judge as mediator at a Financial Dispute Resolution appointment,[24] is compellable to give evidence in relation whether there was an agreement and as to its terms.

Withholding inspection

  • The procedure by which a claim that without prejudice rule immunity does not apply is made under CPR 1998 r 31.19(4) (or FPR 2010 r 21.3(4)) following the procedure in West London Pipeline and Storage Ltd v Total UK Ltd.[25]
  • Where as in Williams v Hull (above) or Brown v Rice and anor,[26] the content of the without prejudice correspondence is the issue, then plainly it must be dealt with as a preliminary issue. The judge must consider the without prejudice correspondence since it is only by so doing that s/he can determine whether the immunity applies: was there impropriety (Williams v Hull); or was there a concluded agreement (Brown v Rice)? In both cases, for different reasons the immunity remained. And if it is held that the immunity remains then the judge who has made that decision cannot try the final issue (unless both parties agree).

Pleading the agreement

  • Specific provision for pleading the existence of an agreement in civil proceedings is set out in CPR 1998 PD16A paras 7.3 to 7.5. Where the alleged agreement has arisen in pre-proceedings correspondence and one party seeks to resile from what the other believes to be an agreement, application can be made (CPR 1998 Part 8) for the court to construe whether there was an agreement; and if so that agreement can then be enforced in ordinary contract law terms.
  • This principle applies equally to an agreement reached between any couple living together (ie whether married or not). However, special rules apply (see part (4) below) to married couples. Certainly if an unmarried couple, with or without children, reach an agreement as to their disposal of their former home (or other issues) then if that is recorded in without prejudice correspondence it will be capable of being construed as an enforceable agreement (subject to any questions which arise as to the agreement being in writing under Law of Property (Miscellaneous Provisions) Act 1989 s 2(1)[27]).
  • It may be said that agreement as to the outcome of a dispute has been reached or (as in Tomlin v Standard Telephones[28]) that there was agreement as to a single issue to which both should be held. In either event the application is under CPR 1998 Part 23 or FPR 2010 Part 18 for consideration of the agreement as a preliminary issue.

5       ADMISSIONS AGAINST INTEREST

Admissions in the course of proceedings

  • Admissions against interest are the mainstay of the without prejudice rule. It enables a party litigation or anticipated litigation to make admissions against interest which cannot then later be adduced later in any proceedings if mediation or other attempts at settlement (eg in solicitor’s correspondence) fail. It is therefore necessary to briefly look at the rules of evidence in relation to admissions and then to look at those rules in the context of the without prejudice rule.
  • In the course of proceedings a party may admit facts. Subject to any later amendment or withdrawal of that admission, the party making the admission will be bound by it. If a party has admitted a fact there is then no need for another party to prove that fact insofar as it is otherwise relevant to an issue between the parties. A simple example of an admission occurs in divorce proceedings where the rules provide that signature on an acknowledgement of service by the respondent to an adultery petition (MCA 1973 s 1(2)(a)) constitutes that respondent’s admission of adultery (FPR 2010 r 7.12(5)) sufficient for the petitioner to obtain a decree nisi. The admission in the acknowledgement of service provides the evidence against the respondent, and it needs no corroboration. Similarly parties to financial remedy proceedings are required in Form E ### to state an estimate of the value of the freehold property they require as part of financial provision###. That is an admission expressed as a need, which could have repercussions for the spouse who makes it where, for example, the other spouse is proved to have more substantial assets than was thought when the admission was made.[29]
  • Silence cannot be treated as an admission. If an assertion made by the claimant is not expressly denied by the respondent this cannot be treated as an admission by that respondent of a fact in issue. Notice to admit such a fact must formally be given.

Notice to admit facts or documents

  • FPR 2010 rr 22.15 and 22.16 adopts the wording of CPR 1998 rr 32.19 and 32.20 and FPR 2010 r 22.15 and 22.16 make formal provision for notices to admit facts and to admit the authenticity of documents (or to produce documents).This deals with admissions as to two separate evidential matters:
  • Facts may be in issue; but one party believes the other has the evidence or ability to admit to their truth. This will overcome the need for the serving party to prove those facts.
  • Deemed admission of facts in a disclosed document; unless a counter-notice requiring proof is served.
  • Thus, where a party gives notice to admit a fact and the other party does not respond, it is then necessary for the serving party to prove the matters referred in the notice if they remain relevant to an issue for trial.

Admissions against interest

  • The extent to which an admission against interest is the main component in the without prejudice rule is stressed by Robert Walker LJ in Unilever plc v The Procter & Gamble Co[30] (‘Unilever’, and a case which is significant in the context of the without prejudice rule) (emphasis added):

[35] …. the without prejudice rule is founded partly in public policy and partly in the agreement of the parties. They show that the protection of admissions against interest is the most important practical effect of the rule. But to dissect out identifiable admissions and withhold protection from the rest of without prejudice communications (except for a special reason) would not only create huge practical difficulties but would be contrary to the underlying objective of giving protection to the parties … to speak freely about all issues in the litigation ….

[36] Parties cannot speak freely at a without prejudice meeting if they must constantly monitor every sentence, with lawyers … sitting at their shoulders as minders.

‘Content of discussions’

  • The subject of the without prejudice rule has been considered by the House of Lords and the Supreme Court twice in recent years (Ofulue v Bossert and Oceanbulk). Judges remain committed to the principle that only what is necessary should be done to restrict the immunity provided by the rule. It is essential that all possible must be done to encourage parties to speak freely, and in the hopes that settlement can thereby be achieved.
  • Just as without prejudice immunity covers negotiations which are part of mediation and other forms of dispute resolution, so too it extends ‘much more widely to the content of discussions’ as a whole, as Lord Clarke explained in Oceanbulk where he said, referring again to Unilever:

It is therefore sufficient to quote [Unilever to show] that the rule is not limited to admissions but now extends much more widely to the content of discussions such as occurred in this case. He said this at pp 2443H-2444C:

‘Without in any way underestimating the need for proper analysis of the rule, I have no doubt that busy practitioners are acting prudently in making the general working assumption that the rule, if not ‘sacred’ (Hoghton v Hoghton (1852) 15 Beav 278, 321), has a wide and compelling effect. That is particularly true where the ‘without prejudice’ communications in question consist not of letters or other written documents but of wide-ranging unscripted discussions during a meeting which may have lasted several hours.

‘At a meeting of that sort the discussions between the parties’ representatives may contain a mixture of admissions and half-admissions against a party’s interest, more or less confident assertions of a party’s case, offers, counter-offers, and statements (which might be characterised as threats, or as thinking aloud) about future plans and possibilities….’

‘Ability to speak freely’ and open discussions

  • There will be cases where the court must decide whether the rule applies at all. The importance of the ability of parties to speak freely in negotiations is emphasised by Unilever (see comment of Robert Walker LJ above); but this must be kept within the limits of the terms of the negotiations. In R v K (A),[31] a husband (K) filed his Form E. After he had filed it his Form E K and the respective firms of solicitors met later in the same day. The solicitors’ accounts of the meeting differed; but the judge found that the early part of the meeting was deliberately intended to be open. Thus it was not covered by any form of privilege from later disclosure in the intended criminal proceedings.
  • Accordingly the Court of Appeal held that the without prejudice rule and Robert Walker LJ’s comments as to dissecting ‘out identifiable admissions [so as to] withhold protection’ from other parts did not assist K:

[49] We accept that if parties to a dispute have entered into “without prejudice” communications with a view to compromising their differences, the protection which normally attaches to such communications covers whatever is said in the course of them, including admissions, and that it is not permissible to isolate some parts and treat them as falling outside that protection. However, that is not this case. There is nothing to prevent parties from expressly agreeing that some communications are “on the record”—that is, unprotected—and others are not. The question the judge had to decide was whether the first part of the meeting [was] held under the cloak of without prejudice protection. Although the notes could be clearer in some respects, we are left in no doubt that it was understood by all present that the first part of the meeting was intended to be “on the record”, in the sense that there were to be no restrictions on the subsequent use that either party could make of what was said, and that the “without prejudice” protection was invoked immediately before Sears Tooth put forward initial proposals with a view to reaching a compromise. We therefore agree with the judge that the first part of the meeting was not held on a “without prejudice” basis.

6       TERMINATION OF PRIVIELGE

Termination or exception of privilege

  • Other than by waiver, when (if at all) does without prejudice immunity, and any confidentiality arising from the immunity, come to an end? The privilege from disclosure of without prejudice documents operates only in respect of production in court, and in respect of deployment in any proceedings which may arise following or alongside the negotiation. Two questions follow from this:
  • Once the entirety of the proceedings are at an end then as between the parties and the court it could be argued that there is no longer any question of privilege from production. To what extent does the confidentiality in the documents remain following conclusion of the proceedings by a court order, so that others can still be prevented from seeing them?[32]
  • The privilege or immunity may also overridden by law in a number of circumstances explained below.

Conclusion of proceedings

  • The conclusion of proceedings (at (1) in the previous paragraph) deals with three sets of circumstance as to when the privilege may be said to subsist or not:
  • Continuation of the immunity as between the parties;
  • Continuation as between one party to a settlement (A) and another party in proceedings (B) arising out of the same dispute where one party to the settlement (A) is a party in the separate proceedings with (C); and
  • Reliance on the privilege in separate proceedings where one party to the settlement is a party in the separate proceedings.
  • In the case of (1) and (3) it may be that the without prejudice rule immunity does not survive; whereas in (2) it does.

Continuation of immunity as between the parties

  • Where a court order is made disposing of all issues between parties then, as between the parties themselves (not third parties to proceedings, see (2) below), the question arises as to whether the immunity arises; or, for example, can one party rely on otherwise immune documents in support of a claim for costs (Calderbank correspondence or not)? When there is an issue before the court as to whether without prejudice communications have resulted in a concluded agreement, evidence of those communications is admissible: Tomlin v Standard Telephones.[33] This was explained by Mr Stuart Isaacs QC (deputy High Court judge) in Brown v Rice:[34]

[10] … when the issue is whether without prejudice communications have resulted in a concluded settlement agreement. This is for the understandable reason that without considering the communications in question it would be impossible to decide whether there was a concluded settlement agreement or not, see Tomlin [(above)) at 1382G and 1386A].

  • If the immunity becomes redundant once there is a court order which disposes of all issues, there is no need for argument about whether the privilege from disclosure exists. Without subsisting proceedings there is no need for the immunity to be continued. Parties can then refer to the position they adopted in mediation or other forms of negotiation when the separate issue of costs comes to be decided.

Confidentiality and without prejudice rule immunity

  • But what of the confidentiality which exists in the negotiations and any documents arising from them? Communications hitherto covered by the without prejudice rule remain confidential as between the parties and any third party (such as a mediator), perhaps indefinitely (Farm Assist Ltd v Secretary of State for the Environment, Food and Rural Affairs (No 2) [2009] EWHC 1102 (TCC), Ramsey J, considered fully at 9.** etseq below). The privilege can only exist as between the parties to the negotiations and the court. Once all court proceedings – the main issue and any third party or intervener claims (as in Rush & Tompkins) – are at an end, or are disposed of by the court (Ofulue v Bossert); or once agreement has been reached in the negotiations, privilege goes (or ceases to be applicable). Meanwhile confidentiality remains.

6        THE OVERRIDING OF WITHOUT PREJUDICE IMMUNITY

Without prejudice privilege: ‘the ability to speak freely’

  • In Unilever plc v The Proctor & Gamble Co [1999] EWCA Civ 3027, [2000] 1 WLR 2436 Robert Walker LJ (as Lord Walker the same judge sat in the House of Lords in Ofulue v Bossert and in the Supreme Court in Oceanbulk) sets out what he terms the ‘most important instances’ (at para [24]) where the without prejudice rule may be held not to apply. Evidence, otherwise thought to be immune from production, may be admissible in subsequent proceedings.
  • The list set out by Robert Walker LJ in Unilever in the Court of Appeal was cited with approval by the House of Lords/Supreme Court in both Ofulue v Bossert and in Oceanbulk Shipping, and is as follows:
  • Where the issue is whether without prejudice communications have resulted in a concluded compromise agreement, those communications are admissible (see eg Tomlin v Standard Telephones and Cables [1969] 1 WLR 1378).
  • Evidence of the negotiations is admissible to show that an agreement arising from negotiations ‘should be set aside on the ground of misrepresentation, fraud or undue influence’.
  • Even if no compromise results ‘a clear statement which is made by one party to negotiations, and on which the other party is intended to act and does in fact act, may be admissible as giving rise to an estoppel’ (see eg Neuberger J in Hodgkinson & Corby v Wards Mobility Services [1997] FSR 178 at 191).
  • One party may be allowed to give evidence of what the other said or wrote in without prejudice negotiations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other ‘unambiguous impropriety’ (see eg Williams v Hull (below)).
  • ‘Evidence of negotiations may be given (for instance, on an application to strike out proceedings for want of prosecution) in order to explain delay or apparent acquiescence.’
  • In Muller & anor v Linsley & Mortimer [1994] EWCA Civ 39, [1996] PNLR 74 (see also above at 8.**) one of the issues between the parties was whether the claimant, in an action against his former solicitors, had acted reasonably to mitigate his loss in his conduct and conclusion of other negotiations and compromise of proceedings. Hoffmann LJ treated that issue as one unconnected with the truth or falsity of anything stated in the negotiations, ‘and as therefore falling outside the principle of public policy protecting without prejudice communications.’
  • The exception for an offer expressly made ‘without prejudice except as to costs’ was clearly recognised by this court in Cutts v Head, and by the House of Lords in Rush & Tomkins, as based on an express or implied agreement between the parties (and see Calderbank v Calderbank considered at 8.** below).
  • Privilege in relation to ‘matrimonial conciliation’ (described by Robert Walker LJ as ‘That hybrid species of privilege’ will be considered in the next chapter).

Without prejudice correspondence: evidence of agreement

  • Where one party asserts that correspondence, otherwise covered by the without prejudice rule, is evidence of an agreement then – if that party is correct – the immunity from production of the evidence to the court goes (Tomlin v Standard Telephones and Cables (above)). The correspondence, formerly immune from production, becomes the evidence (or part of it) for the agreement between the parties. The alleged agreement in Tomlin v Standard Telephones was that in correspondence – all marked ‘without prejudice’ – the parties had agreed that, whatever the outcome of the damages claim in terms of quantum, the plaintiff should receive fifty per cent. A hesitant Court of Appeal (Ormord LJ dissenting) held that this is what had been agreed. Dankwerts LJ (with whom Sir Gordon Wilmer agreed) reasoned the agreement point as follows (at 1382-1383):

… In the course of his judgment, however, Lindley LJ [in Walker v Wilsher (1889) 23 QBD 335] said at 337

‘What is the meaning of the words ‘without prejudice’? I think they mean without prejudice to the position of the writer of the letter if the terms he proposes are not accepted. If the terms proposed in the letter are accepted a complete contract is established, and the letter, although written without prejudice, operates to alter the old state of things and to establish a new one.’

That statement of Lindley LJ is of great authority and seems to me to apply exactly to the present case if, in fact, there was a binding agreement, or an agreement intended to be binding, reached between the parties, and, accordingly, it seems to me that not only was the court entitled to look at the letters, though they were described as ‘without prejudice’, but it is quite possible (and, in fact, the intention of the parties was) that there was a binding agreement contained in that correspondence.

  • An example of the point is provided by Admiral Management Services Ltd v Para-Protect Europe Ltd & Ors [2002] EWHC 233 (Ch), where Stanley Burnton J considered a claim on a preliminary issue as to interpretation of the terms of a paragraph in a Tomlin order otherwise agreed between the parties. Of this he held as follows:

[71]…when it is alleged that a settlement has been concluded as a result of without prejudice communications, those communications are admissible as to the issue whether a settlement has in fact been concluded: Tomlin v Standard Telephones [1969] 1 WLR 1378. Similarly, in the case of a settlement made in without prejudice correspondence, the correspondence, although privileged when sent and received, is admissible in the event of a dispute as to the terms and meaning of the settlement, on the same basis that any correspondence in which a contract is made is admissible.

  • Whether the same will be said of the content of mediation negotiations where a memorandum of understanding is concluded but has not been advised upon by lawyers, remains to be seen. The likelihood is that this will depend upon at what time it is held that the agreement becomes executory.[35]

Without prejudice used to ‘cloak perjury, blackmail or other unambiguous impropriety’

  • Without prejudice rule documents cease to be immune from production if they are established as being used a ‘cloak for perjury, blackmail or other unambiguous impropriety’. Robert Walker LJ’s list (in Unilver at 2444) describes this heading as:

Apart from any concluded contract or estoppel, one party may be allowed to give evidence of what the other said or wrote in without prejudice negotiations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other ‘unambiguous impropriety’ (the expression used by Hoffmann LJ in Forster v Friedland (unreported), 10 November 1992; Court of Appeal (Civil Division) Transcript No. 1052 of 1992).

  • The impropriety allegation was raised as a preliminary issue in Williams v Hull.[36] The main claim was by former cohabitants who sought a declaration from the court as to their beneficial interests in their jointly owned property under Trusts of Land and Appointment of Trustees Act 1996. Their contributions to the purchase price had been such that Ms Williams (W), who was herself a solicitor, had paid appreciably more than Mr Hull (H). The couple had signed a TR1 (transfer of title) which appeared to have been altered after its execution by them. This was the document which might be treated as defining their beneficial entitlements.
  • W sought an order that privilege did not attach to a letter written to her by H. This letter was one in a series of three written by the couple to each other before the issue of proceedings. W wanted to rely on the second letter from H to her and headed by him: ‘Subject to Contract and Without Prejudice’ where he made specific reference to his then estimate of the valuation of, and of his share in, the property. W wanted H’s letter admitted because, she said, the letter was not covered by the without prejudice rule which. To allow it to remain immune would act as a ‘cloak for perjury’ by H. She argued that H’s pleaded case – that he was entitled to an equal share in the property with her – was contradicted by the letter.
  • Arnold J held that there might be inconsistencies between H’s pleaded case and what was asserted in the letter, and this might lead ultimately to an allegation of perjury. However, such an allegation at a preliminary stage in the proceedings was not enough to override the immunity to production of the letter at this stage. It must remain covered by without prejudice rule immunity from production.

Facts admitted in negotiations, later denied

  • The facts admitted basis for exception from without prejudice rule immunity applies in any civil proceedings. Family financial remedy proceedings provide an easy example, where (say) a party has admitted facts in the course of negotiations, but denies one or more of those fact when it comes to a final hearing. For example, in negotiations between solicitors, in collaborative law sessions or in mediation a spouse (A) admits to possession of a particular asset; but when settlement does not follow he will not admit the existence of the asset in sworn or other court documents.
  • A preliminary issue application can be made to establish whether the admission was made and whether A’s admission is covered by privilege given that, on the face of it, it is covered by the rule against privilege being used as a ‘cloak for perjury, blackmail or other “unambiguous impropriety”’.[37] A mediator may find him/herself called to give evidence if an admission has been made and only the mediator can corroborate the claimant spouse’s evidence on this issue. The same would apply to a district judge at a FDR.[38]

6        WAIVER OF WITHOUT PREJUDICE IMMUNITY

Joint waiver

  • Without prejudice immunity can only be waived by the person or persons who are entitled to immunity as a result of it. Without prejudice immunity is joint as between the parties to the negotiation. It can only be waived by them jointly (save in the case of the Calderbank reservation on costs, where the right to refer to negotiation can be retained: privilege can be unilaterally waived on that issue alone). As between the client (the parties to the mediation) and the mediator, the privilege is always that of the client jointly with other parties to the mediation.
  • If there is a negotiated agreement, the terms of that and background facts on which it is based or to determine whether it is an agreement can be adduced in evidence a subsequent trial. To that extent the immunity no longer applies where it the issue before the court.[39]

7        DUTY TO DISCLOSE TO THIRD PARTIES

Duty to anyone funding the litigation

  • A party to litigation, who is funded by a third party (but not their opponent: eg under Matrimonial Causes Act 1973 s 22ZA (legal services order)), may find themselves under an requirement to provide information about settlement as part of any agreement between a client and the lender; just as a company may need to inform its auditors of the state of any outstanding litigation (and perhaps the likelihood of settlement) when accounts are prepared.
  • As between the loan company and its borrower it is entirely understandable that this condition should be required (see similar provision for legal aid below); but strictly speaking the information in, and the documents concerned, are subject to the without prejudice rule. It could be said that the other party’s knowledge of the loan would imply a term into the contractual basis of without prejudice correspondence

Statutory requirement to disclose

  • Civil Legal Aid (Procedure) Regulations 2012 reg 40 imposes on the lawyer for the person with the benefit of legal aid certificate a number of duties concerning the conduct of their case, to Legal Aid Agency (‘LAA’). Some of this information, especially, if part of negotiations or marked ‘without prejudice’, may be confidential as between the client and other parties to the proceedings. A similar provision has existed in previous legal aid delegated legislation (eg Civil Legal Aid (General) Regulations 1989 imposed on the lawyer a duty to ‘make a report’ but only ‘where the assisted person declines to accept a reasonable offer of settlement or a sum which is paid into court’).
  • Civil Legal Aid (Procedure) Regulations 2012 reg 40(3)(a) provides as follows:

(3) The provider must report to the Director—

(a)a refusal by the individual (or the person acting on behalf of the individual) to accept—

(i)an offer to settle;

(ii)an offer to mediate any issue in the proceedings;

(iii)an offer to use an alternative dispute resolution procedure; or

(iv)any other offer of settlement which the provider considers to be reasonable;

  • The vires for this provision must be regarded at least as questionable. There is no obvious power in Legal Aid Sentencing and Punishment of Offenders Act 2012, the enabling statute, to permit regulations to provide – as here – for another individual’s, the offeror’s, confidentiality to be overridden. (Few offerors are likely, in practice, to object: but that is a separate point.) The nearest the 2012 Act comes to considering privilege in the context of legal aid is in s 28(1) which provides as follows:

(1)The fact that services provided for an individual are or could be provided under arrangements made for the purposes of this Part does not affect—

… (b) any privilege arising out of that relationship, or…

except to the extent that regulations provide otherwise.

  • The privilege here is that which arises out of the client relationship, that is legal professional privilege, and cannot be said to apply to any privilege arising from the without prejudice rule which is derived from the relationship of the parties to the courts. (No provision is made in regulations to override the privilege which attaches to any advice given by a lawyer to his/her client on the offers etc referred to in reg 40(4)(a), should the Legal Aid Agency as to have information as to that advice.)

Production of without prejudice correspondence at the FDR appointment

  • Requirement of FPR 2010 r 9.17 (under the heading: ‘The FDR [Financial Dispute Resolution] appointment’ is as follows as to the requirement that the parties ‘file’ (ie in effect, produce to the court) any negotiation correspondence for the purposes of the FDR appointment. This requirement is imposed without a nod (save at the end of s-s (4)) to the existence of any privilege in the documents, which would exist if they are part of settlement negotiations and contain admissions against interest (which is inevitable if serious proposals are put forward).

(3) Not less than 7 days before the FDR appointment, the applicant must file with the court details of all offers and proposals, and responses to them.

(4) Paragraph (3) includes any offers, proposals or responses made wholly or partly without prejudice(GL), but paragraph (3) does not make any material admissible as evidence if, but for that paragraph, it would not be admissible.

(5) At the conclusion of the FDR appointment, any documents filed under paragraph (3), and any filed documents referring to them, must, at the request of the party who filed them, be returned to that party and not retained on the court file.

Warnings

Some of this, esp towards teh end, is in note form

= text to be provided

E&OE to 15 September 2015

© David Burrows, Burgundy, 15 September 2015

[1] At 4.## etseq

[2] Per eg Bristol Courts Family Conciliation Service (1978)

[3] [1993] 1 FLR 932, CA

[4] See Ch # for discussion of this terminology and of FPR 2010 Part 3

[5] The Rule of Law Tom Bingham, Penguin (2010), at Chapter 8 (entitled ‘Dispute Resolution’) at p 86

[6] [2009] UKHL 16

[7] [2009] EWHC 2844 (Ch); and see further 4’##

[8] The point is affirmed also in Avonwick Holdings Ltd v Webinvest Ltd & anor [2014] EWHC 3322 (Ch) where David Richards J held: ‘In common with Arnold J in Williams v Hull [2009] EWHC 2844 (Ch) at [18] … I take the view that the correct approach is that stated by Lord Mance [in Bradford & Bingley Plc v Rashid [2006] UKHL 37, [2006] 1 WLR 2066]. Marking a document as “without prejudice” is a strong indication that there is a genuine dispute and a genuine attempt to settle the dispute, but it is not conclusive.’

[9] Discussed at #.##

[10] [1976] Fam 93, see #.##

[11] Privilege and a fair trial is considered at #.##

[12] [1980] AC 521 at 541

[13] [2006] UKHL 37,  [2006] 1 WLR 2066

[14] [2007] EWCA Civ 502, [2007] 1 WLR 2443

[15] [2013] UKEAT 0448-13-0511, HHJ Hand QC (sitting alone)

[16] For disclosure see 2.## etseq

[17] 4.##

[18] 4.##

[19] See further at #.##

[20] See eg [Blair case]

[21] Tomlin v Standard Telephones [1969] 1 WLR 1378

[22] 4.##

[23] 4.##

[24] 4.##

[25] [2008] EWHC (Comm) 1729 Beatson J; considered fully in Practice of Family Law: evidence and procedure, David Burrows, Jordans 2012 at #.##

[26] [2007] EWHC Ch 625

[27] Considered fully ay 5.##

[28]  [1969] 1 WLR 1378

[29] This may not matter; but better advice would be to refuse to answer that question till disclosure is complete

[30] [1999] EWCA Civ 3027, [2000] 1 WLR 2436

[31] [2009] EWCA Crim 1640, [2010] Q.B. 343, [2010] 1 FLR 807

[32] It is also of relevance to mediators and is touched upon at 4.##

[33] [1969] 1 WLR 1378

[34] [2007] EWHC Ch 625

[35] Considered further at #.##

[36] [2009] EWHC 2844 (Ch) Arnold J. The judge discusses the impropriety heading fully at [45]–[55]

[37] Robert Walker LJ in Unilever explained at 4.##

[38] The questions of a mediator and a judge in FDR providing evidence and corroboration is dealt with respectively at #.## and #.##

[39] Brown v Rice and anor [2007] EWHC Ch 625, Stuart Isaacs QC sitting as a deputy judge of the High Court; and see #.##

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4 thoughts on “Without prejudice rule immunity – unrevised

  1. Pingback: CIVIL PROCEDURE, COSTS & SANCTIONS: LINKS TO RECENT ARTICLES AND POST | Civil Litigation Brief

  2. You so impressive! Where you get the time and brain power?

    Gave first ever talk I’ve got paid for today,at Slater and Gordon, to manc collab group including the very lovely Alison Bull who I’ve not seen for ages.

    Will read your pertinent article soon

    And aim to send an impertinent riposte

    Mwah!

    PS fab re Tom and Jerry show,huh…labour party must adapt or die….

    X

    Sent from Yahoo Mail on Android

    From:”dbfamilylaw” Date:Tue, 15 Sep, 2015 at 10:50 Subject:[New post] Without prejudice rule immunity – unrevised

    dbfamilylaw posted: “1        INTRODUCTION Negotiation immunity Without prejudice rule immunity is more generally known as without prejudice privilege. This book will avoid the term ‘privilege’, because privilege is generally reserved for confidential information which”

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