“Without prejudice” privilege and the effect of marking a document privileged

http://www.bailii.org/ew/cases/EWHC/Ch/2014/3322.html

It is a well-established principle that for a document to be inadmissible on the ground that it is  “without prejudice”, it must form part of a genuine attempt to resolve a dispute. If there is no  dispute about liability, but only a negotiation as to how and when it should be discharged, the  negotiations, and documents produced in the course of them, are not covered by “without prejudice”  privilege. In this case, Richards J established on the facts that the parties had communicated on the basis that there was  an existing liability and so there was no genuine dispute at the relevant time. However, the judge went on to consider whether it made  any difference that the correspondence in  question had  been marked “without prejudice” by an experienced litigator. He concluded that it did  not. He agreed that the express marking of a document as without prejudice was a “highly material  factor” and that although the test is an objective one: “in circumstances where the party who has  initiated communications as “without prejudice” wishes to say that they are not without prejudice, I would hesitate before saying that evidence from that party as to  their reasons for marking the correspondence without prejudice is not admissible. In any event, I  must approach this issue on the basis that a litigation solicitor would deliberately use the term  “without prejudice” in its usual sense”.

Nevertheless, even the use of the expression by an experienced litigator “is not conclusive”. If,  on analysing the evidence, the court finds that there was no genuine dispute, “the only conclusion,  itself not an impossible one, is that the solicitor made a mistake”.