http://www.bailii.org/ew/cases/EWHC/Comm/2016/486.html

The claimant alleged that the defendant was in repudiatory breach of contract when it sent two emails giving notice to terminate a contract. The defendant countered that the claimant couldn’t rely on the emails because they were protected by without prejudice privilege. Although the emails were marked "without prejudice", the claimant argued that they were not protected by the privilege because there was no extant dispute between the parties (and the dispute arose upon receipt of the emails) and they were instead a statement of intention in mandatory terms. Flaux J reviewed the existing case law on WP privilege and held as follows:

  1. The parties can, by contract, extend the usual ambit of the WP rule (but they had not done so in this case).
  2. In deciding if there is a "dispute", a "crucial consideration is whether, in the course of negotiations, the parties contemplated or might reasonably have contemplated litigation if they did not agree" (seeBarnetson v Framlington (Weekly Update 22/07)). This doesn't turn on temporal considerations – instead it is necessary to look at the subject matter of the dispute.
  3. The issue of whether there is a dispute has to be determined objectively.
  4. Sometimes public policy considerations override the public policy protecting without prejudice communications. However, the judge concluded that there is no public policy requiring repudiatory conduct to be opened up and to override WP privilege.

On the facts of the case, Flaux J concluded that the emails were protected by WP privilege. The dispute could not be said to have started with the sending of the emails. If viewed in isolation, they could be seen as being somewhat mandatory, but when seen as part of the whole chain of correspondence, they were still part of ongoing negotiations.