Court of Appeal decision endorses broad view of without prejudice protection

The Court of Appeal has held that discussions between a defendant's solicitor and a claimant litigant in person were or ought to have been seen by both parties as "negotiations genuinely aimed at settlement" and therefore protected by the without prejudice rule. In doing so, the court overturned the High Court's decision, which it said took too narrow a view of the kinds of discussions that may be protected by the rule: Suh v Mace (UK) Limited [2016] EWCA Civ 4.

The decision illustrates that discussions may be protected by without prejudice privilege where it should be obvious that their purpose is to try to resolve the dispute, even if that is not openly acknowledged and the question of settlement does not come up until some way into the discussions. The case suggests that a broad view is likely to be taken, particularly where one party does not have legal representation and so the purpose and status of the discussions might not be made as clear as would be expected if lawyers were involved on both sides.

The judgment also suggests that a court will be slow to find that a party has waived without prejudice privilege simply because it has responded to an opponent's attempts to introduce evidence of the discussions without raising the issue - particularly, though perhaps not exclusively, where the party in question is unrepresented. Still, the safe course where an opponent seeks to introduce evidence of without prejudice discussions must be to object to their admissibility without delay.

Background

The underlying claim was brought by two tenants, a recently estranged husband and wife, against the defendant landlord. The claim alleged wrongful forfeiture of their lease of business premises.

The wife asked to meet the defendant's solicitor, a Ms Jackson. At the outset of the meeting, when asked about the purpose of the meeting, the wife explained that she wanted to know what was happening with the case and how it was progressing. Ms Jackson proceeded to ask the wife a series of questions, which (on Ms Jackson's account of the meeting) elicited an admission that there were outstanding arrears of rent at the time of the forfeiture.

In the course of the meeting, the wife indicated that she wanted to get out of the litigation. Ms Jackson said the defendant might be prepared to negotiate to let the wife withdraw from the proceedings without paying all the costs if she made a statement confirming her admission regarding outstanding arrears.

Ms Jackson served a statement summarising the discussions and exhibiting her attendance notes. The wife served a statement in response. The claimants subsequently argued that the discussions were protected by without prejudice privilege and therefore neither Ms Jackson's statement nor the wife's response were admissible in evidence.

The High Court held that the discussions were not without prejudice, as they were not for the purpose of a genuine attempt to compromise a dispute between the parties. The claimants appealed. 

Decision

The Court of Appeal (Vos LJ, with whom Beatson LJ agreed) overturned the High Court's decision and found that the discussions were protected. The true question was whether the discussions were or ought to have been seen by both parties as negotiations genuinely aimed at settlement. The judge took a narrow view of the kind of discussions that might be regarded as such. In the Court of Appeal's judgment, a broader view was required.

Lord Justice Vos commented that, where litigants in person are concerned, it may sometimes be more difficult to determine objectively whether discussions amounted to negotiations genuinely aimed at settlement. Here, however, he said it would have been obvious to any outsider that the wife had asked for the meeting because she wanted to see how she could get out of the proceedings. She was not there to answer Ms Jackson's questions, nor to obtain legal advice (which Ms Jackson repeatedly pointed out she could not provide). The only sensible purpose for such a meeting must have been to seek some kind of resolution to the litigation.

Further, there was no justification for "salami slicing" the meeting into parts that were open and parts that were without prejudice. Such an approach would contravene the broad view required by the authorities. Therefore, the entirety of the discussions and the subsequent correspondence were without prejudice and therefore, prima facie, inadmissible in evidence.

The defendant further submitted that the wife could not benefit from the without prejudice protection because: (i) she had used the cloak of without prejudice discussions for what the High Court judge had found to be lies contained in her witness statement, or alternatively (ii) the claimants had waived without prejudice protection, including by putting forward the wife's witness statement supporting their case that the admissions had not been made, but not arguing that the discussions were subject to without prejudice privilege. The Court of Appeal rejected these submissions. 

In relation to (i), the Court of Appeal noted that there is an established exception to the without prejudice rule where a party has abused the privileged occasion by using it as a cloak for perjury, blackmail or other "unambiguous impropriety". That exception did not apply here. On the defendant's case, the wife had told the truth in the without prejudice meeting. The fact that the wife later denied admissions she had allegedly made in the without prejudice discussions, even if the judge was justified in saying the denial was a lie, did not amount to an attempt to use the rule as a cloak for perjury, blackmail or other unambiguous impropriety.

In relation to (ii), the defendant had obviously waived its right to rely on the privilege by filing Ms Jackson’s statement in the proceedings and making it plain the defendant intended to rely on the content of the discussions. Whether the claimants had waived the privilege required an objective evaluation to determine whether it would be unjust, in the light of their conduct, for them to argue that the admissions were privileged from production at trial. On the facts, that was not the case. The wife's statement and the various other matters relied on to support the submission of waiver were all reactions to the defendant's solicitor's attempt to ignore the privilege which attached to the discussions. It would be unjust and contrary to the requirement for the privilege to be protected to hold that the claimants’ unguarded response to that conduct amounted to a waiver of the privilege itself.