In many legal disputes, particularly in the employment sphere, extensive use is made of without prejudice (WP) discussions. Discussions are WP if they are made in the course of a dispute between parties and represent an attempt to settle that dispute. While it is common for parties to make it expressly clear when discussions are WP and to record that fact in any documentation, it is good practice, not a legal requirement.
Generally, WP discussions are inadmissible as evidence in litigation. The principle behind the rule (as set out in Unilever plc v The Procter & Gamble Co [2000]) is that there is a public interest in avoiding unnecessary litigation. There is, therfore, a benefit in enabling parties to make concessions and proposals without the fear that everything they say will be used as a stick to beat them with in any subsequent trial.
In practice, there are two areas where parties may disagree about whether any discussions are WP. First, the requirement that there be a pre-existing dispute and, secondly, the principle that the WP precept cannot be used to conceal perjury, blackmail, or ‘unambiguous impropriety’.
An employer that wishes to remove an employee and wants to make a WP offer of a settlement agreement, will not benefit from the WP rule if the employee is unaware that they are at risk of termination. In BNP Paribas v Mezzotero [2004], Ms Mezzotero raised a grievance about her treatment before and after her maternity leave. The employer’s first response was to invite Ms Mezzotero to a meeting to discuss her situation. She was told that the meeting was to be WP. At the meeting, she was told her position was untenable and that it would be best for the business if she were to leave and that the bank would offer her a redundancy package. The Employment Appeal Tribunal (EAT) confirmed that the discussion was not properly WP, because at the time of the discussion, there was no pre-existing dispute that the parties could seek to settle. The lesson here for employers is to ensure that, before any WP discussion, the employee has already been warned that there is an issue – this should chime with good practice in the vast majority of circumstances.
The recent EAT case of Woodward v Santander UK plc [2010] has addressed the thorny issue of WP discussions in the context of allegations of discrimination and whether that brought the discussions within the unambiguous impropriety exception, which would permit evidence of the discussions to be brought to the attention of the EAT. Diana Woodward had brought numerous claims against Abbey National in connection with her dismissal in November 1994 and those claims were settled in 1996 without any admission of liability. Having had difficulty finding work over the following years, Woodward formed the view that Abbey was interfering with her job search by giving unfavourable references, in retaliation for her earlier claim. Woodward commenced further proceedings against the bank for victimisation and under the whistleblowing legislation.
In the further litigation, Woodward sought to introduce evidence of the 1996 WP negotiations, in particular Abbey’s refusal to agree to provide a reference as part of the agreement. Woodward’s argument was that this refusal showed the bank had ‘reprisal in mind’ at the time of the negotiations and that all of the other evidence should be viewed in that context (as a matter of fact, the EAT found that the bank had not given any negative references, but had, inadvertently, failed to reply to one request). Woodward’s counsel argued that the second limb of the decision in Mezzotero is that evidence of discrimination cannot be excluded by the WP rule and that a lower level of impropriety should be applied. The EAT decided that the benefits of the WP rules apply just as much (if not more) to discrimination cases and the WP exception for discrimination cases is the same standard as for other cases.
If WP evidence is to be brought into evidence, then the EAT must be satisfied that the impropriety is unambiguous. Blatant examples of discrimination will be admissible, but behaviour that can be read either way will, if made in WP discussions, remain inadmissible.
By Greg Campbell, partner, Mischon de Reya. BNP Paribas v Mezzotero [2004] UK EAT 0208/04/3003 Unilever plc v The Procter & Gamble Co [2000] 1 WLR 2436 Woodward v Santander UK plc [2010] UKEAT 0250/09/2505