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Archive for September, 2016

‘Without Prejudice’ rules ok?

In October 2014 we looked at the much used but sadly oft misused words ‘without prejudice’ in the light of the High Court decision in Avonwick Holdings Ltd v Webinvest Ltd and another [2014] EWHC 3322 (Ch).  With great speed an appeal was taken to and heard by the Court of Appeal.  Judgement was given by Lord Justice Lewison.  He held “There are two bases for the operation of the without prejudice rule.  The first rests on public policy and that policy is to encourage people to settle their differences.  However, in order for that head of public policy to be engaged there must be a dispute. … The other basis for the rule is contractual, that is by contract the parties may extend the usual ambit of the without prejudice rule.”

Lord Justice Lewison considered the case and determined that “On the facts of this case, in my judment the judge was right to say there was no dispute at the time the communications took place” and, in relation to the second basis for operating the without prejudice rule, “Freedom of contact is a basic principle of English law.  If A and B agree for valuable consideration that their communications will not be used in civil proceedings in court, I find it difficult to see why, as a matter of principle, the court should not uphold their agreement.”  However, he continued “This must however be done by agreement.  One person cannot unilaterally impose a rule on another.”  He found there was no agreement.  Hence, the High Court decision was upheld and the appeal dismissed.

The Court of Appeal in Gresham Pension Trustees v Cammack [2016] EWCA Civ 655 re-confirms that without prejudice privilege cannot be waived unilaterally.  Following late settlement of a dispure, the parties agreed costs should be decided by the trial judge.  Counsel for the claimant showed the judge an undisclosed attendance note referring to settlement discussions between counsel for each party.  As a result, the judge ordered the defendant to pay the claimant’s costs from the discussion date.  However, the Court of Appeal considered it to be “plain beyond any argument” that the recorded conversations were ‘without prejudice’.  The defendant had not consented to waive privilege.  The note was, therefore, wrongly put before the judge and hence use of his discretion re costs was flawed.

Use of the words ‘without prejudice’ must be handled with care and with full knowledge of the implications.  If you wish to hear more, why not contact Hatherleigh Training?