The Gazette 1991

g a z e t t e

april

1991

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.

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

(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