The recent judgment in Morris v Williams [2025] EWHC 218 (KB) is a solemn reminder that marking a letter "without prejudice – save as to costs" will not always result in the contents being inadmissible.
In this case arising out of a road traffic collision, the defendant had alleged that the claimant was fundamentally dishonest. The claimant's solicitors had written a letter to the defendant marked "without prejudice – save as to costs" which contained a Calderbank offer. The offer was that the claimant would pay the defendant a sum of money and would also "admit that he was fundamentally dishonest in respect of some of the representations made in respect of this claim. However, it should be noted that he is only prepared to make such an admission on the basis that it be contained in a non-disclosure agreement to the effect that the case cannot be discussed or reported in any way, with any third parties at all..."
The defendant did not accept the offer and instead applied for the letter to be adduced in evidence on the basis that it fell within one of the exceptions, namely "unambiguous impropriety", to the without prejudice rule. The defendant argued that the letter should be admitted as evidence because in it the claimant accepted that he had been fundamentally dishonesty in relation to some aspects of his claim. Consequently he should not be allowed to pursue a case where he disputed that he had been fundamentally dishonesty.
DJ Dodsworth, sitting in the Sunderland District Registry of the High Court, carefully reviewed the law including the case of Merrill Lynch v Raffa [2001] ILPr 31 which was analogous. He concluded that the letter did contain an admission that the claimant had acted in a way that was fundamentally dishonest and this "crossed the line" into unambiguous impropriety. The DJ said at paragraph [21]: "This is an example where the public policy arguments in favour of litigating disputes with full disclosure trump the policy argument in allowing parties to speak candidly and with protection of the contents of the discussions, to encourage settlements."
This case is a reminder to word correspondence very carefully, even when marked without prejudice, because it may be scrutinised by a court in the future. In this case if the solicitors had merely said in the without prejudice correspondence something like that they recognised that some claims would be difficult to prove or the court may find that the claimant was over-egging his injury, the letter would have remained inadmissible as part of settlement negotiations. But by going one step further and admitting that the claimant had been fundamentally dishonest the without prejudice shield was lost and the letter was weaponised against the claimant.
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.
