In this article Redmans employment law solicitor Chris Hadrill examines the circumstances in which without prejudice settlement negotiations can be admissible as evidence in Employment Tribunal proceedings.
The ‘without prejudice’ rule generally prevents oral or written statements made in a genuine attempt to settle an existing dispute from being put before a court or tribunal as evidence of an admission adverse to the interests of the party that made the statement. It is a well-established (and useful) rule that operates in practice to allow parties to be full and frank in correspondence about factual and/or legal matters, with the principal aim of encouraging informed settlement of disputes. However, there are some circumstances in which there is an exception to this rule and communications which would otherwise be protected under without prejudice privilege can be rendered admissible in legal proceedings. These exceptions apply in the following circumstances:
- Where there is not yet a dispute between the parties
- Where all parties agree to waive privilege
- Where there is ‘unambiguous impropriety’ by one or more parties
We’ll address these exceptions in their relevant order below (please note that these examples are not exhaustive)
Lack of a dispute
The without prejudice rule will not apply where the parties are not yet in dispute, or where the parties are in dispute but the correspondence or discussions merely set out the parties’ respective positions in that dispute or criticise the other party’s position.
Waiver of privilege
It is possible for parties to waive privilege in relation to without prejudice correspondence or negotiations, but only when both (or all) parties to such correspondence expressly and unequivocally waive privilege. Examples of such waivers include the cases of:
- Brunel University and another v Vaseghi and another  EWCA Civ 482 – the Court of Appeal held that the parties had waived privilege with regards to some without prejudice communications which were considered as part of an employee’s grievance as the employer had attached a copy of the grievance report referring to such communications to its ET3
- Somatra Ltd v Sinclair Roche & Temperley  EWCA Civ 229 – the Court of Appeal held that parties can jointly agree to waive privilege but, where the parties do so, any communication waived will be be admissible in its entirety, including any admissions made in it
The without prejudice rule must not be used as a cloak for perjury, blackmail or other ‘unambiguous impropriety’ (Unilever v Procter & Gamble Company  1 WLR 2436). In the leading case of BNP Paribas v Mezzotero  IRLR 508 it was suggested that unambiguous evidence of discrimination in without prejudice communications may also lead such communications to having its protected communications label removed, and in Brunel University & another v Vaseghi & Webster  482 the Court of Appeal suggested that the need to establish the truth in discrimination claims could outweigh the protection otherwise granted by without prejudice communications. This was, at the time, regarded as both a decision which potentially aided the interests of justice (in allowing unambiguous evidence of discrimination which would otherwise be inadmissible from being put before the court) and also one which could potentially cause headaches for parties attempting to be full and frank in their attempts to settle disputes, as a clear consequence of this ruling could be that parties ‘combed’ through without prejudice correspondence in order to establish an inference of discrimination and therefore render such correspondence admissible.
In Woodward v Santander UK plc UKEAT/0250/09 the Employment Appeal Tribunal partially closed the door on the new ‘exception’ of discrimination, holding that one party merely drawing attention to without prejudice communications from which an inference of discrimination could be drawn was not enough to remove the protection that such communication would otherwise enjoy; in order to remove without prejudice protection from a communication the evidence of discrimination must be unambiguous in nature. In practice, it’s unlikely that there are going to be many examples of where there is unambiguous evidence of discrimination within a communication which would otherwise enjoy without prejudice protection.