The Gazette 1991

g a z e t t e

a p r i l 1991

Without prejudice or without effect?

Part 2

THE BASIS UPON WHICH

THE RULE IS FOUNDED

It is submitted that the without

prejudice rule is founded upon

public policy. The intention of the

offeror that the communications in

question should not be admissible

against his must be coupled with

an actual or constructive recog-

nition on the part of the offeree to

this end. The public policy

reasoning is clear and has been

referred to previously. Likewise,

that the rule reflects the intentions

of the parties has been accepted in

several judicial dicta.

However, if

the foundation stone of the rule is

the parties' intention and the

recognition of same, it is submitted

that so long as this intention/

recognition is found, the use of the

express words "without prejudice"

is not necessary. However, it is

plausible that cases may arise

where the words are not used and,

yet, the privilege will be conferred.

Paradigm cases involved a series of

letters, the first and perhaps some

subsequent are headed "without

prejudice", but one or more are not.

In such a case, what some writers

call an "implied without prejudice",

comes into play. The intention must

be on the part of the offeror with

. . an 'implied without

prejudice' [may come] into play."

public policy dictating that the

offeree must not unreasonably

disregard this intention by seeking

to admit the documents in

question.

However, once the

conditions for the privilege to

attach have been met, waiver will

only be possible with the consent

of both.

Clearly the offeree must

have reasonable notice of this

intention. Using the words "with-

out prejudice" is the most

straightforward way of bringing

such an intention to the notice of

the other side. But there are

alternative methods.

It is without doubt that the

courts have sometimes given

protection without the express use

of the "magic formula" and it is

therefore essential to consider the

manner in which such an intention

may be expressed and reasonably

contemplated if the precise words

are not used.

One context in which the courts

have been asked to consider this

question is where the words are

Thomas Courtney,

B.A., LL.B,

Nuala Jackson, B.A. (Mod),

LL.M., B.L.

used in the initiating document and

a course of correspondence follows

thereafter; is the initial expression

of the words sufficient to evince an

intention to protect later docu-

ments in the same course of

negotiations even if the words are

not specifically used in the later

documents?

It would appear from the

authorities that if the course of

negotiations is commenced with-

out prejudice, this protection will be

sufficient to cover subsequent

discussions.

An exception to this

rule would be where there is a clear

break in the chain of corres-

pondence.

However, such a

break merely means that a renewed

expression of intention and reason-

able contemplation is required if

protection is to exist in relation to

this new chain of correspondence.

It would further appear that it may

be possible to benefit from the

protection retrospectively where

the position has been rapidly

rectified:

(1877).

Halsbury states that the

juridical basis of the possible

retrospective use of these words is

" . . . if a communication is

intended to be "without pre-

judice", and is accepted by the

other party as such, then the

privilege attaches".

However, judicial dicta in cases

where this has been considered,

seem to view the second letter,

attempting to attach the privilege,

as merely a postscript to the earlier

letter. This would mean that the

time lapse between them would

need to be extremely short so that

the two could effectively be read as

one. The former rationale, as

expressed by Halsbury, would

appear to permit a greater time

lapse between the relevant

communications. This issue was

considered by the English Court of

Appeal in

Oliver -v- Nautilus Steam

Shipping Company.*

The plaintiff

had suffered an injury in the course

of his employment. It was con-

tended that he should be barred

from claiming compensation for his

injuries on the basis that he had

accepted weekly payments made

to him by his employer. The

evidence was that the first such

payment had been accepted

unconditionally but that the second

and subsequent payments had

been accepted on a "without

prejudice" basis.

Nevertheless, the court was

prepared to hold that the privilege

attached to all of the payments.

That the court so held was clearly

based on the view that this was the

intention of the parties. Romer L.J.

stated

" I think the second payment and

subsequent payments, which

were made expressly without

prejudice, shew, under the

circumstances, that the parties

must, as between themselves,

have treated the first payment as

not having irrevocably bound the

workman, but, for the purpose I

am now considering, as having

been made also wi t hout

prejudice".

It would further appear that,

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