| Date | 19 July 2000 |
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| Judgment | Rush & Tompkins -v- Greater London Council (Court of Appeal) 21 December 1987 |
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| The Issue | The application of the term "without prejudice" |
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| Implication |
The purpose of "without prejudice" privilege its to enable parties to negotiate without risk of their proposals being used against them if the negotiations fail. |
printThe term "without prejudice" is sometimes misunderstood and misused. The English legal system requires, as a matter of general public policy, the application of certain rules requiring discovery and disclosure of documents in civil proceedings. These have been carried through to Rule 31 in the new Civil Procedure Rules. The disclosure of documents is intended to provide the parties with the relevant documentary material before a trial, so as to assist them in appraising the strength or weakness of their respective cases and thus to provide for the fair disposal of the proceedings before or at the trial. This obligation is subject to certain exceptions. For example, communications between a party and its legal advisors, whether for the purposes of legal advice or the purposes of pending or continuing proceedings, are privileged from disclosure. The "without prejudice" exception applies however in a different sense, and was examined by the Court of Appeal in the case of Rush & Tompkins Limited v Greater London Council in December 1987. It was held that with the "without prejudice" rule was founded partly on public policy and partly upon implied agreement. The underlining policy is 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 negotiations may be used to their prejudice in the course of the proceedings. Parties should be encouraged to fully and frankly to put their cards on the table. In the 1984 case of Cutts v Head, it was stated; "it obviously is desirable to facilitate compromise rather than forcing the parties to litigate to the end, but to achieve a compromise one of them has to make an offer. He might be apprehensive that his offer might be used against him if the negotiations failed, so he would make his offer "without prejudice" to his position if the offer was refused ". Thus letters and documents exchanged during the course of negotiations aimed at settling disputed matters will be labelled with the term "without prejudice" with the objective that should the negotiations fail, these documents may not be put in evidence at subsequent proceedings. Rush & Tompkins had sued the GLC and one of its sub contractors, P.J Carey, seeking a declaration that the GLC were liable to pay any sum which they (Rush & Tompkins) were liable to pay to Carey in respect of direct loss and expense under the sub contract. In the event Rush & Tompkins settled with the GLC by an agreement under which the GLC paid the sum of £1.2 million to Rush & Tompkins who were to be responsible for meeting all sub contractors' claims. Rush & Tompkins' action against Carey then went to sleep for over three years. Eventually however, that dispute came before the court and Carey made an application for specific discovery of "without prejudice" correspondence between Rush Tompkins & the GLC. Carey sought to identify how the global settlement with the GLC had been arrived at and in particular how the parties to that agreement had evaluated Carey's claim. In the Official Referee's court the judge held that the "without prejudice" correspondence was privileged from disclosure. This was reversed in the Court of Appeal, where it was held that the parties must be taken to have intended and agreed that the privilege from disclosure would cease if and when the negotiations "without prejudice" came to fruition in a concluded agreement. This approach derived from an implied agreement between the parties and was entirely consistent with the considerations of public policy whereby parties were to be encouraged to settle their disputes. The Court of Appeal thus held, a) the privilege afforded by the correspondence between Rush & Tompkins and the GLC being marked "without prejudice" came to an end when that correspondence came to fruition in the compromise agreement; b) that correspondence would in any event have been disclosable between the GLC and Rush & Tompkins had it been relevant to any issue that remained outstanding between them after the compromise agreement; and c) the correspondence was certainly disclosable as between Rush & Tompkins and Carey. Two final observations seem appropriate. Firstly, it is possible for the parties to use a form of words which enable the "without prejudice" correspondence to be referred to even though no concluded settlement is reached. For example, where the "without prejudice" documents might be referred to in establishing the parties' liability as to costs. Secondly, the "without prejudice" label will enable a party to make statements and correspondence which cannot subsequently be brought forward in evidence against him in the course of litigation. The label therefore should be used only in circumstances where the document contains statements that might be regarded as admissions of liability. Use of the "without prejudice" label too liberally may give rise to a situation where a party is precluded from relying upon a letter which contains no material admissions against its interest but rather helpful statements which that party might benefit from disclosure. The "without prejudice" label can generally be withdrawn unilaterally but one cannot easily separate paragraphs and passages of letters and retain their original context.
CJ-0028
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