The increasing prevalence of alternative forms of dispute resolution (ADR) across civil and common law jurisdictions has placed greater emphasis on the applicability and recognition of the 'Without Prejudice' (WP) privilege. In its widest sense, this privilege prevents the use of communicative statements, either textual or verbal, made in a settlement forum between parties, from being put forth as admissible evidence.
To this end, the purposive rationale of enabling this privilege has been to mold public opinion in favor of pre-litigation settlement. The scope of settling disputes out of court has multiple benefits, with the relative lowering of legal costs, alongside the potential for increased access to justice.
Interestingly, the application of the WP privilege has been looked at through different lenses, each often tinted with varying legal jurisdictional ambits and swiveling public policy opinions. In this respect, this piece will now consider the application of the WP privilege, in the UAE and the UK.
Assessing the UAE Perspective – A Notable Shift or a One-off Decision?
The UAE legal system, when analyzed from a macro-perspective, has been largely reflective of a civil law system that has been relatively insular to applying common law principles, like the WP privilege. Although more recently, the decision in case No.486/2024 (Dubai Court of Cassation) has been indicative of policy divergence in favor of the WP privilege.
Notably, this judgement upheld the decision released by the Dubai Court of Appeal, indicating the prospect of the UAE legal system warming towards the eventual application and recognition of the WP privilege. Importantly, from a confidentiality perspective, this is a significant development for a civil law-based UAE onshore court.
However, the aforementioned judgment may be treated as a one-off exception to the usual practice, or it could signify the beginning of a transformation within the Dubai Courts and potentially in the UAE courts. Nevertheless, this judgment could serve as a precedent for parties to argue that settlement negotiations should not be recognized as an admission by the UAE Courts. If this argument succeeds and similar rulings follow, it could lead to WP protection's explicit inclusion in UAE law.
Nonetheless, the key takeaway for UAE legal practitioners here is that until WP protections are not consistently enforced, they should continue to advise their clients to refrain from making written offers or compromises unless confidentiality safeguards are in place. Additionally, they should encourage parties to label settlement communications as 'without prejudice' to support their argument of such communication's inadmissibility as evidence.
Assessing the UK Perspective – Limitations to the Matured WP Outlook
Contrastingly, the UK has a more mature interpretation of the WP privilege, due to the centrality of confidentiality and pre-litigation settlement protocols within its common-law system. However, despite its maturity, UK courts have more recently begun placing limitations on the widening scope of the WP privilege. Notably, this limiting intervention by courts was reflected in Pentagon Food v B Cadman,1 wherein the courts held the view that an extended WP privilege, like the mediation privilege, cannot be activated by default, unless specifically addressed in the subject mediation contract.
Alternatively, in Avonwick v Webinvest Limited,2 the UK Court of Appeal held that the activation of the WP privilege is not conclusive, unless there is either a dispute being contemplated or an already prevailing dispute at the time of settlement communications.
Lastly, both these jurisdictional cases are reflective of how the WP privilege is subject to contractual and legal, checks and balances to remain effective. In addition, although both jurisdictions are at varying levels of maturity with respect to recognizing the WP privilege, it is promising to note that the UAE civil onshore courts are taking credible steps towards recognizing the WP privilege, a common-law cornerstone.
Conclusively, such developments would also further stimulate cooperation between the UAE and UK legal systems, a promising prospect for cross-border transactors seeking policy consistency.
Footnotes
1. Pentagon Food Group Ltd and others v B Cadman Ltd [2024] EWHC 2513 (Comm).
2. Avonwick Holdings Limited v Webinvest Limited & Anor [2014] EWCA Civ 1436.
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