Discussions will be protected by without prejudice privilege where it is obvious that their purpose is to resolve a dispute, even if this is not expressly agreed between the parties. This may prove important in cases involving litigants in person or lay litigants, as in the recent English case of Suh v Mace (UK) Ltd.
WHAT IS WITHOUT PREJUDICE PRIVILEGE?
Without prejudice privilege prevents statements made in a genuine attempt to settle a dispute from being used as evidence against the party that made them. It is founded on the public policy of encouraging litigants to settle their disputes rather than litigate them to a finish.
WHAT HAPPENED IN SUH V MACE (UK) LTD?
Two tenants, Mr and Mrs Suh, brought proceedings against their landlord for wrongful forfeiture of a lease. The tenants did not instruct solicitors to represent them and acted instead as litigants in person.
Mrs Suh arranged to meet with the landlord's solicitor to discuss how the case was progressing. During the meeting, she admitted that she and her husband were behind with the rent payments. She also told the solicitor that "she no longer wanted any part in the proceedings" and asked how she could "get out" of them. This prompted a discussion about negotiation, and the solicitor for the landlord indicated that her client might be willing to let Mrs Suh withdraw from the proceedings without any cost penalties.
The landlord later sought to admit Mrs Suh's statement about the rent arrears as evidence of its right to forfeit the lease. Mrs Suh claimed that the statement could not be admitted as it had been made on a without prejudice basis.
The English High Court held that the statement was not protected by without prejudice privilege as the purpose of the meeting had not been to negotiate a settlement of the proceedings. On appeal, however, the Court of Appeal took a much broader approach.
A BROAD APPROACH
The Court of Appeal said that the court must consider matters from an objective standpoint, though it acknowledged that where litigants in person are concerned, it can be difficult to determine objectively whether discussions were negotiations genuinely aimed at settlement.
It considered that the only sensible purpose for Mrs Suh arranging to meet her opponent's solicitor was to seek some kind of solution to the litigation.
The Court said that this would have been obvious to any outside observer from the beginning.
The Court found that the entire discussion and the correspondence that followed were protected by without prejudice privilege and were therefore inadmissible, unless the tenants had waived the privilege.
HAD THE TENANTS WAIVED PRIVILEGE?
The landlord argued that the tenants had waived the right to claim without prejudice privilege. The landlord's solicitor had made it clear in correspondence that the landlord intended to rely on Mrs Suh's admissions, and the tenants did not object to this until later in the proceedings.
The Court said that the question of whether the tenants had waived privilege required an objective evaluation of the tenants' conduct. The Court had to determine whether it would be unjust, in light of their conduct, for them to argue that the admissions were privileged and inadmissible at trial.
On the facts, the Court found that it would be unjust and contrary to the requirement for the privilege to be protected to hold that the tenants' unguarded response to the landlord's conduct amounted to a waiver of the privilege itself.
IMPLICATIONS OF DECISION
The decision serves as a reminder of the importance of clarifying at the outset of any discussions whether the discussions are on a 'without prejudice' basis or not. This is particularly important when the other party is a litigant in person. When in discussions or negotiations with a litigant in person, it may also be useful to explain the concept of without prejudice privilege and how it might apply. This will help to avoid any uncertainty or potential disagreement and will also avoid any suggestion that one party sought to take advantage of an opponent's lack of legal representation.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.