Two High Court decisions illustrate broad application of without prejudice protection

In two recent cases, the courts have rejected attempts to introduce evidence of without prejudice (WP) communications. The decisions emphasise the important public policy role of the WP rule in encouraging settlement by ensuring parties can negotiate freely, without fear of concessions made during settlement negotiations being used against them in the course of litigation.

In R (on the application of Wildbur) v Ministry of Defence [2016] EWHC 821 (Admin), the court found that even the fact of a failure to reply to an offer of mediation (if there was such a failure) was protected by the WP rule.

In Ravenscroft v Canal & River Trust [2016] EWHC 2282 (Ch), the court confirmed that there was no general exception to the protection of the WP rule where WP communications were referred to only for the purposes of an interlocutory hearing.

It is well-established that the protection of the WP rule is not absolute. It cannot for example be used as a cloak for impropriety (see this recent post) and there are various other circumstances where evidence of WP communications can be admitted, such as where the issue is whether a concluded settlement has been reached, or where the fact of negotiations taking place is needed to explain a party's delay (see this post for a list of recognised exceptions). However, these two decisions illustrate a general tendency on the part of the courts to give the WP rule broad application and resist making further in-roads into the protection it offers. The decisions are considered in more detail below.

Wildbur

The claimant sought judicial review of the MoD's decision on a "service complaint" he had lodged after he was made redundant by the army. In granting permission for judicial review, the judge encouraged the parties to endeavour to settle the matter, including by the use of mediation.

The claimant proposed mediation. The MoD then wrote proposing a WP meeting. A consent order was made staying directions for a specified period to enable the parties "to undertake alternative dispute resolution".

A WP meeting took place but was ultimately unsuccessful and the case proceeded. The MoD objected to two passages of the claimant's reply to the MoJ's detailed grounds of resistance. These passages stated that the MoD had "refused mediation", attending only an "informal meeting" .

Cranston J ordered the passages to be struck out on the basis that they had disclosed the content of WP communications. Applying Cutts v Head [1984] Ch 290, the WP rule applied to a failure to reply to an offer (if there was a failure) as much as to an actual reply. This principle was not limited to specific offers of settlement; it applied equally to the fact of an offer of settlement negotiations.

In many cases, a party who proposes mediation will wish to be able to point to that fact, and any refusal or failure to respond on the part of its opponent, once the court comes to consider the question of costs, after the substantive issues have been determined. Where that is the case, it is advisable to mark the correspondence "without prejudice save as to costs" so that it can be considered by the court at that stage.

Ravenscroft

The claimant brought an action against the Canal & River Trust (CRT) after the CRT seized his boat due to licencing issues. He applied for the appointment of a "McKenzie Friend" to assist him at the hearing, on the basis that he was impecunious, had no relevant experience in litigation and was largely illiterate. The CRT took exception to the claimant's choice of McKenzie Friend, Mr Nigel Moore, who they said was part of a broader campaign against the CRT.

As part of their objection to his appointment, the CRT sought to rely on a short extract of WP communications made in the course of settlement negotiations between the parties. The CRT submitted that the court could have access to such communications for the purpose of deciding interlocutory hearings, and that this did not infringe the public policy requirement that admissions made in WP communications may not be used for the purposes of the trial. Chief Master Marsh disagreed, finding that the extract could not be relied on.

The court distinguished Family Housing Association (Manchester) Ltd v Michael Hyde and Partners [1993] 1 WLR 354, where a party was permitted to rely on WP communications to resist a strike-out application for want of prosecution. That decision established an exception to the WP rule where a party seeks to explain the passage of time by reference to WP negotiations. There is not, however, a general exception which applies whenever WP communications are referred to only for the purposes of an interlocutory hearing.  

The court described what the CRT was seeking to do as an attempt to 'cherry pick' from the WP communications to benefit their own interests. The court emphasised that any exceptions to the rule "should be kept closely confined to prevent an undesirable watering down to the protection provided".