73 / 462
g a z e t t e
april
1991
Thus, if, contained within the
document headed without pre-
judice, there are s t a t emen ts
unconnected with the attempts at
settlement, these will be admissible
as falling outside the scope of its
protection. Threats and defamatory
statements may be admissible
despite their having been uttered in
a without prejudice document.
30
This, it is submitted, is in con-
formity with the public policy
behind the principle concerned and
with the requirement of bona fides.
There are numerous authorities in
support of this principle. In
Kurtz &
Co. -v- Spence and Sons
(1887)
31
the defendants were the owners of
a patent and the plaintiffs were
negotiating with them for the right
to manufacture using the process
concerned. Negotiations were
conducted without prejudice, both
orally and in writing, and, in the
course of these without prejudice
nego t i a t i ons, the de f endan ts
threatened that unless agree-
ment was reached, they would
seek to enforce their legal rights.
Such threats were contrary to the
Patents Act 1883 s. 32 .
3 2
It
was held t hat the " w i t h o u t
prejudice" protection only ex-
tended to genuine attempts at
settlement and thus did not extend
to the defendants' threats as to the
likely outcome if negotiations
failed.
The privilege against disclosure
is not, however, limited to offers but
extends to all communications
forming part of the negotiations
unless the privilege is otherwise
defeated in the manner set out
infra. In
South Shropshire D.C. -v-
Amos
(1987)
33
the court was
asked to consider whether or not
the protection of this rule extended
to an "opening short" in negotia-
tions. This case concerned an
application for compensation by
the defendant in respect of his
premises, the use of which had
been discontinued owing to an
order having been made in
accordance with the Town and
Country Planning Act 1971 (U.K.).
The defendant's claim was made in
letters headed "without prejudice".
These negotiations were eventually
unsuccessful and, in accordance
with the statutory provisions, the
matter was referred to a Lands
Tribunal. It was argued by the
plaintiffs that claims for statutory
compensation could not,
inter alia,
be made on a without prejudice
basis and that, in any case,
initiating offers were not protected.
"The privilege ageinst dis-
closure is not, however, limited
to offers but extends to all
communications forming part of
the negotiations
This argument gained support from
the judgment of Harman J in
Norwich
Union Life
Insurance
Company -v- Tony Waller Ltd.
(1984)
34
in which he stated that a
course of nego t i a t i ons was
essential
" . . . which must imply that
each side has expressed a view
and that a modus vivendi
be tween
t hem
is
being
proposed
He therefore concluded that the
protection did not extend to letters
initiating negotiations. Parker L.J.
disagreed with this limitation.
" I f this were so no one could
safely proceed directly to an
o f f er to accept a sum in
se t t l ement of an as yet
unquantified claim".
The court accepted that the
juridical basis for such extension
was the implied agreement
between the parties as referred to
Fox L.J. in
Cutis -v- Head.
3
*
" . . . to achieve a compromise
one of them has to make an
offer. He might be apprehensive
that his offer might be used
against him if the negotiations
failed. So he would make his
offer without prejudice to his
position if the offer was refused.
But that was unfair to the other
party. It was one-sided. So it was
necessary to extend the without
prejudice umbrella to cover both
parties".
Thus, the court allowed the
defendant's appeal and the letters
were held to be inadmissible.
Part 2 of this article will appear
in the April, 1991
Gazette.
NOTES
(1)
Simaan General Contracting Co. -v-
Pilkington Glass Ltd.
[1987] 1 All E.R.
345 at 347, per Judge John Newey
Q.C.
(2) See
Cutts -v- Head
[1984] 1 All E.R.
597 at 605 - 606 where Oliver L.J.
held
"That the rule rests, at least in part,
on public policy is clear from many
authorities, and the convenient
starting point of the inquiry is the
nature of the underlying policy. It is
that parties should be encouraged so
far as possible to settle their disputes
without resort to litigation and
should not be discouraged by the
knowledge that anything that is said
in the course of such negotiations
(and that includes, of course, as
much the failure to reply to an offer
as an actual reply) may be used to
their prejudice in the course of the
proceedings. They should, as it was
expressed by Clauson J. in
Scott
Paper Co. -v- Drayton Paper Works
Ltd.
(1927) 44 R.P.C. 151 at 157, be
encouraged freely and frankly to put
their cards on the table . . . The
public policy justification, in truth,
essentially rests on the desirability of
preventing statements or offers
made in the course of negotiations
for settlement being brought before
the court of traial as admissions on
the question of liability".
(3) R.S.C. ORder 32 rule 2 - "Either party
may call upon the other party to admit
any document
saving
all
just
exceptions
(4)
Roche -v- Peiiow
[1986] I.L.R.M. 189;
cf.
Hanafin -v- Gaynor
(1990) Irish
Times Law Report 24 September 1990.
(5)
Holland and Others -v- McGiii and
Others Unrep.
H.C. 16/3/1990 per
Murphy J.
(6)
O'Flanagan -v- Ray-Ger Limited, Roper
and Bourke Unrep.
H.C. 28/4/1983.
Here Costello J. said:-
"the defendant had headed the letter
"without prejudice" but these words
alone possess no magic properties
and some more substantial grounds
had to be found to justify the
defendants' objection to the
admissibility of this letter".
(7)
Rush and Tompkins Ltd -v- Greater
London Council and Another
[1988] 3
All E.R. 737 at 740.
(8)
" . . .
all evidence wh i ch is
sufficiently relevant to an issue
before the court is admissible"
(Cross on Evidence 7th Ed. at p. 51).
But this is subject to the proviso set
out at page 60 thereof" . . . that the
evidence tendered does no infringe
any of the exclusionary rules that
may be applicable to it".
This general principle of the
admissibility of relevant evidence would
appear to be part of the constitutional
guarantee of fairness of procedures -
S
-v- S
[1983] I.R. 68. See also
The
People -v- T., Unrep.
CCA 27/07/88
where Walsh J. stated at p. 42 of the
transcript
" . . . the administration of justice
itself requires that the public has a
right to every man's evidence except
for those persons who are privileged
in that respect by the provisions of
the constitution itself or other
established
and
recognised
privilege".
(9)
Kurtz and Co. -v- Spence and Sons
(1887) 58 L.T. 438.
53