Admissibility of 'without prejudice' documents (Avonwick v Webinvest)

Avonwick Holdings Limited v Webinvest Limited and Mikhail Shlosberg [2014] EWHC 3322 (Ch)

The Chancery Division has allowed documents marked as 'without prejudice' to be admissible as evidence at the forthcoming trial. In doing so, it held the documents were not covered by the 'without prejudice' privilege as there was no genuine dispute at the time the documents came into being (applying Bradford & Bingley). This judgment is a useful reminder of the key authorities and criteria applied in determining admissibility of documents labelled as 'without prejudice'.

Summary and practical implications

In allowing the 'without prejudice' documents to be admissible at trial, the judge held, among other things:

  • Bradford & Bingley plc v Rashid [2006] 2 All ER (Comm) 951, [2006] UKHL 37Unilever Plc v T V Procter & Gamble Co [2001] 1 All ER 783
  • 'for a document to be inadmissible on the grounds that it is "without prejudice", it must form part of a genuine attempt to resolve a dispute. There needs to be both a genuine dispute to be resolved and a genuine attempt to resolve it. If there is no dispute about a liability, but only a negotiation as to how and when it should be discharged, the negotiations, and documents produced in the course of them, are not covered by the "without prejudice" exception to the admissibility of relevant evidence' (para 19, applying Bradford & Bingley and Unilever). In this case, the correspondence proceeded 'quite clearly on the basis that there [was] an existing liability and that the whole purpose of the proposals [was] to arrive at an agreed restructuring of that admitted liability'. Further, the court found there was no evidence the claimant (applicant) 'believed, or had reason to believe, that there was any dispute about the liability until receipt of [the] witness statement' (para 34)
  • 'the issue is whether at the time of the relevant communications there existed a genuine dispute ... Communications made at a time when there is no dispute cannot, with retrospective effect, be made subject to the without prejudice privilege by subsequently raising a dispute' (para 35). Here the court found no dispute existed at the time the relevant communications came into being
  • South Shropshire District Council v Amos [1987] 1 All ER 340Williams v Hull [2009] EWHC 2844 (Ch), [2009] All ER (D) 216 (Nov)
  • the express marking of documents as without prejudice is 'a highly material factor in determining their status' and a 'strong indication that there is a genuine dispute and a genuine attempt to settle the dispute, but is not conclusive' (paras 22 and 26, applying Amos and Williams). 'Even the use of the [without prejudice] expression by an experienced litigator [was] not conclusive. If on analysis of the evidence the court is satisfied that there was no genuine dispute to which the proposals were directed, the only conclusion, itself not an impossible one, is that the solicitor made a mistake' (para 37)
  • 'the test for determining the purpose of marking documents without prejudice is entirely objective and ... the actual intention of the writer is irrelevant' (Pearson). However, where the party who had initiated the without prejudice label now sought to contend they were not 'without prejudice', the court was hesitant in not admitting evidence from that party 'as to their reasons for marking the correspondence without prejudice'. This was especially so where the label was put on by a litigation solicitor who had, presumably, deliberately used that label in 'its usual sense'. Here, however, as above, the judge found there was no genuine dispute to which the proposals were directed and therefore the label had been incorrectly applied (para 36).

For more information on the issues raised in this judgment, see For the full findings in the instant application and a detailed background to the matter, see the full judgment.

 Date of judgment: 10 October 2014

Further reading

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Without prejudice communications

Pre-contractual negotiations and statements 

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First published on Lexis PSL Dispute Resolution

 

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