Making a Meal of it
In this post, we at Paradigm Family Law want to discuss the concept of ‘Without Prejudice’ in negotiations to settle a case. It is a phrase used most often in the legal profession, and is seen as an effective way of conducting off the record settlement negotiations. As we will see it is also applicable to Mediation and is very effective in encouraging participants to speak freely and frankly when it comes to making offers to settle.
Without Prejudice Immunity
When used, the phrase “Without Prejudice” prevents the content of what follows being used in any subsequent proceedings if the settlement negotiations are unsuccessful.
But is it foolproof? It is a phrase perhaps too often used, and many is the time when it appears on correspondence when perhaps the content of the letter it ‘protects’ has nothing privileged about it. It can be used to hide behind, but it does not give anyone carte blanche to write anything they like or do anything they please and expect to be given immunity.
In the case of BE v DE  EWHC 2318 (Fam) the subject of ‘without prejudice’ meetings was considered by Mr Justice Bodey. In that case, the family court had to decide whether a tete a tete dinner date between a divorcing couple was a without prejudice meeting or in actual fact a (romantic) dinner. At the dinner, the husband produced a separation agreement for his wife to sign which he contended settled all her claims and would avoid a divorce. The wife however viewed things differently. She believed they were having a meal and that it was to talk about saving the marriage. She was taken aback by the agreement thrust in front of her, and said that she was pressured into signing it.
The husband argued that the dinner and agreement were without prejudice and not something that the court could therefore take openly in evidence.
Mr Justice Bodey dismissed the husband’s application for three reasons:
- There was not “as yet in existence a dispute or sufficiently definable dispute between this couple which the law envisages and requires for the without prejudice protection to attach.”;
- He did not consider that “in the overall context that it is shown to have been clear from the surrounding circumstances that the parties were seeking to compromise any dispute which (strictly on this hypothesis) existed.” He added that the meeting had not been held in an office, nor with an agenda, and that the husband, according to the wife, simply produced the document and subjected her to pressure to sign it. He questioned whether that raised the question of whether it was a bona fide attempt to settle;
- Even if he is wrong on point 1 and 2, Mr Justice Bodey went on – reflecting that if the without prejudice principle had been invoked – he determined that as long as the wife was only referring to the fact of the dinner itself and the fact of the production of the agreement by the husband she does NOT offend the without prejudice principle where it is engaged.
Mr Justice Bodey referred to Phipson on Evidence 18th edition and specifically [in an extract from his judgment]:
The starting-point is that written or oral communications made in a genuine attempt to settle a dispute between the parties will not generally be admitted into evidence: Phipson paras.24-09 and 24-13.
The policy is that parties should be encouraged to settle their disputes without resort to litigation and such that they can speak freely: Cutts v. Head  Ch 290 at 306 per Oliver LJ.
A first unsolicited letter offering settlement or negotiations marked ‘without prejudice’ will as a matter of policy therefore be protected; and so it is that the without prejudice principle is said to rest partly (a) on that public policy just mentioned and partly (b) on an express or implied agreement between the parties that they will not later rely in an open context on the contents of settlement negotiations. There has to be a bona fide attempt to resolve a dispute, in the absence of which the without prejudice principle is not engaged: Phipson 24-11.
…..the words “without prejudice” are not essential, although clearly persuasive. When they are not used, the occasion or document may still be found to be without prejudice “…if it is clear from the surrounding circumstances that the parties were seeking to compromise the action”: Rush & Tompkins v. GLC  1 AC 1280 at 1299 per Lord Griffiths. At para.24-13(d) Phipson puts it in this way:
“Even if the words ‘without prejudice’ were not used, the without prejudice principle will still apply if the circumstances, judged objectively, were such that it can be assumed to have been intended that the communications in question, being made with a view to settlement, be not admitted in evidence.”
In the recent case of WD v HD  EWHC 1547 (Fam) the court determined that FPR 28.3(8) which provides that: “(8) No offer to settle which is not an open offer to settle is admissible at any stage of proceedings, except as provided by rule 9.17.” only applies to first instance proceedings, and therefore Appeals are outside the scope of the no order principle. This recognises the need to encourage settlement and enable parties to protect themselves from the high costs of appeals.
All mediations are conducted without prejudice. Mediation is confidential and an opportunity for the parties to negotiate freely. And that is absolutely the right way to operate. However, the financial disclosure in the mediation process is not privileged, and can be used in any subsequent proceedings. That might be useful in seeking to establish examples of less than frank disclosure or inconsistencies in the information presented from one time to another. It is another example of the without prejudice principle in practice, and that it won’t always give a blanket of protection to a party trying to play the system.
And something else to consider – be careful when you mediate in another jurisdiction. Head of International, Frank Arndt says, “In some European jurisdictions they have different principals. For example, in the Netherlands not all communications with the mediator are without prejudice and may have to be disclosed to the other spouse. Ask before you have without prejudice negotiations, what rules and principals are used in the particular country”.
Coffee and Mints
So the words without prejudice do not need to be written or uttered when making your next dinner date for it to be an opportunity for off the record activity.
However, it is still necessary for the date to be in the context of an ongoing dispute and your chat up lines turn to matters meant to settle your differences. But if so, be aware – matters of fact whispered across the table may not be given the protection you might seek by the time you get to the coffee and mints.
If you would like any more information about this or any family law topic, we’d love to hear from you. You can call Paradigm Family Law on 0845 6020422 or email us at [email protected]. Ask us about our fixed fees for divorce and financial matters. You can also follow us on twitter and LinkedIn.