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