Archive for February, 2011

Without Prejudice

Parties are often surprised when they must produce for the court a list of all documents within their control upon which they not only rely to support their own case but which will adversely affect it or support that of another party.  Unless the document can be withheld from inspection (for instance because it was written by their lawyer and contains legal advice), the documents listed can be seen by the judge and the other parties to the dispute.

However, to enable parties to negotiate and put forward proposals which might induce a settlement, the parties can speak and write on a “without prejudice” basis.  The courts protect such negotiations from disclosure.  Lord Hoffman, for instance, has stated that “it allows the parties to speak freely without the fear that their statements will be relied upon as admissions if negotiations should break down” (Bradford & Bingley plc v Rashid [2006] UKHL 37).

The judges are therefore reluctant to find exceptions to the without prejudice rule.  Lord Neuberger, now Master of the Rolls, has said that exceptions can create practical difficulties and would be “contrary to the underlying objective of giving protection to the parties” (Ofulue and another v Bossert [2009] UKHL 16).

There are exceptions nevertheless.  For instance, if a settlement is reached, the tag falls away.  Further, if the court’s interpretation on the meaning and effect of a settlement is required, facts identified during without prejudice negotiations which lead to the purported settlement are admissible in evidence.  Nevertheless, Lord Clarke giving judgement in Oceanbulk Shipping & Trading SA v TMT Asia Ltd & Others [2010] UKSC 44 said that in allowing disclosure he was “not seeking either to underplay the importance of the without prejudice rule or to extend the exception beyond evidence which is admissible in order to explain the facual matrix or surrounding circumstances to the court whose responsibility it is to construe the agreement”.

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