UK: House Of Lords Reinforces "Without Prejudice" Protection

Last Updated: 8 September 2009
Article by Toby Read

The Ofulue & Anor v Bossert case considered whether a without prejudice letter sent in prior proceedings could be brought before the court in subsequent proceedings between the parties.

  • It is well-known that without prejudice correspondence in the proceedings to which it relates is inadmissible. The House of Lords held that such correspondence is also inadmissible in subsequent proceedings between the same parties.
  • The House of Lords reviewed the principles behind attributing privilege to certain documents and correspondence. The public policy justification for without prejudice privilege is well established and is set out in Cutts v Head [1984] Ch.290, 306 as resting on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court as admissions of liability.
  • Where a letter is written "without prejudice" during negotiations with a view to reaching a compromise, it will attract litigation privilege unless the other party can show that there is a good reason for such privilege not to subsist.
  • It is not appropriate or practical when considering whether "without prejudice" communications are admissible to try to weed out the parts that deserve protection and the parts that do not.
  • Whilst the decision strengthens the 'without prejudice' rule, it also acknowledged that it is not absolute. It cannot, for example, be used to hide perjury, blackmail or other unambiguous impropriety.

The case concerned an appeal against an adverse possession order. The defence in the original proceedings was served in 1990, admitting the registered freeholder's title but denying their right to possession. In a without prejudice letter written the following year, the occupier offered to buy the property. The first proceedings were struck out in 2002.

In 2003, fresh possession proceedings were issued and a defence of adverse possession was then entered. The registered freeholder relied on s.29 of the Limitation Act 1980, arguing that the running of time for adverse possession had been interrupted by the acknowledgment of title in the earlier proceedings and in the without prejudice offer to buy the property.

One of the issues the court had to consider was the extent to which it was permissible for one party to rely on a statement made by another party in without prejudice correspondence written with a view to settling earlier proceedings between the same parties.

The majority of the court held such correspondence should be inadmissible. Lord Hope stated that "The court should be very slow to lift the umbrella [of without prejudice protection] unless the case for doing so is absolutely plain"......"If converting offers of compromise into admissions of acts prejudicial to the person making them were to be permitted no attempt to compromise a dispute could ever be made".

With the exception of Lord Scott's dissenting judgment, the Lords made it clear that the appellant's argument that parts of the without prejudice letter should be considered as admissible facts rather than admissions that are indisputably true was a distinction too subtle to apply in practice and was contrary to the underlying objective of without prejudice protection.

The court recognised that unseen dangers may lurk behind things said or written during without prejudice discussions and the protection afforded is necessary in the interests of promoting attempts to achieve a settlement. The without prejudice protection is not to be defeated by other unforeseen public policy considerations which may emerge later.

Lord Scott disagreed with the other Law Lords in his ruling and proposed that the public policy rule relating to without prejudice statements does not apply where the statement in question is common ground between the parties, is the basis on which they have pleaded their respective (earlier) cases and where the absence of the protection afforded by the rule cannot sensibly be thought to be apt to inhibit their attempts at compromise.

Although Lord Scott considered the judgment to be an extension of the previous without prejudice rule, the other Law Lords disagreed and considered it a continuation of the public policy protection afforded to genuine attempts to settle a dispute.

Clients should remember the following when entering into without prejudice correspondence:

  • Just marking something "without prejudice" does not afford it protection. It is the substance of the document or correspondence that determines whether privilege attaches to it and so there has to be a genuine attempt to compromise a dispute.
  • Even if the attempt is genuine, the protection can be lifted if the correspondence is an attempt to hide blackmail, perjury or unambiguous wrongdoing.
  • If a concluded agreement is reached in without prejudice correspondence then that correspondence will subsequently be admissible. Evidence of the negotiations is also admissible to show that an agreement apparently concluded between the parties during the negotiations should be set aside on the ground of misrepresentation, fraud or undue influence.
  • Even if there is no concluded compromise, a clear statement which is made by one party to negotiations, and on which the other party is intended to act and does in fact act, may be admissible as giving rise to an estoppel.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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