‘Without prejudice’ communications, made when negotiating legal disputes in order to aid agreement, are not normally admissible in court. The idea behind them is to allow the parties to explore possible areas of agreement and make suggestions and admissions which they would not be willing to admit to in court.
A recent case shows, however, that just heading a communication ‘without prejudice’ does not offer blanket protection from disclosure.
The Supreme Court ruled that facts communicated in without prejudice correspondence, which would be admissible but for the without prejudice rule, could be admitted in evidence in a subsequent dispute to which they were relevant, provided that their disclosure was appropriate in order to understand the circumstances surrounding the matter and served as an aid to the construction of the agreement reached.
Although it may seem that this makes it risky to rely on the precept that disclosures made without prejudice will remain undisclosed, the ruling made it quite clear that the disapplication of the rule would not be extended beyond evidence necessary to explain the ‘factual matrix’.
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Partner Note
Oceanbulk Shipping and Trading v TMT Asia Ltd. and others [2010] EWCA Civ 79.