Navigating Negotiations: A Guide To The "Without Prejudice" Rule

WHAT IS 'WITHOUT PREJUDICE' AND IT'S APPLICATION IN COMMUNICATION?

The Black's Law Dictionary (9^th Edition) defines 'without prejudice' as "Without loss of any rights; in a way that does not harm or cancel the legal rights or privileges of a party".

In other words, if a party makes statements during a negotiation phase with another party, it cannot be admitted, prejudiced or used against them with respect to their legal rights when they seek to employ a means of dispute resolution such as litigation or arbitration.

THE COMMON LAW'S APPROACH TO THE USE OF 'WITHOUT PREJUDICE'.

In the case of In Re Daintrey; Ex parte Holt (1893) 2 QBD 116 the court noted that a relying party's communication should be with respect to a dispute or negotiation with another. The words 'without prejudice' therefore did not result in an automatic privilege in all matters.

In the case of South Shropshire District Council v Amos [1986] 1 WLR 1271, the court per Lord Justice Parker stated that privilege could attach to a document headed ʺwithout prejudiceʺ even if it is an opening shot. This meant that documents or communication made to initiate negotiation could be covered by privilege and therefore could not be admissible in court.

THE GHANAIAN POSITION

Section 105 of the Evidence Act, 1975 (NRCD 323) states that, "A person has a privilege to refuse to disclose, and to prevent any other person from disclosing.... information concerning conduct or statements made as an integral part of the compromise negotiations."

It is evident from this provision that the Evidence Act, 1975 recognizes the right of a party when that party seeks to enforce a privilege related to statements or communications made especially in instances of negotiation by parties.

Larry Ettah v WondaWorld Property Ltd and 1 Other SUIT NO. H1/52/2023, dated the 4^th of May 2023: It involved an appeal at the Court of Appeal against the order of the High Court that dismissed the Defendant's application. At the core of the case was a letter labelled Exhibit SNYM 2 made by the Defendants/Appellants to the Plaintiff/Respondents regarding an amount owed by the Appellants to the Plaintiff.

The court in examining the exhibit held that thought it was marked 'without prejudice' it did not show the furtherance of any negotiation among the parties. Therefore, since there was no controversy or dispute among the parties at the time of writing the letter by virtue of the Appellant admitting the debt, the Respondents were not entitled to the privilege granted under the auspices of 'without prejudice' rule.

'WITHOUT PREJUDICE' IN MODERN COMMUNICATION

With the advent of the technological age, email communication is a formal place of communication when parties are interacting and negotiating. However, negotiations and discussions occur on other means of digital communication such as WhatsApp, Telegram, Teams and others.

With respect to this modern means of communication, the protection 'without prejudice' still applies. The benchmarks stated, such as the communication being one that seeks to negotiate to settle a dispute should be present in the interaction. Notably, where a party or a lawyer in negotiating uses the term 'without prejudice' in its first communication when email is the means of communication, and omits it thereafter, it will be deemed that the rest of the communication made in that email thread, so far as it relates to the negotiation is covered by privilege.

It can be reasonably inferred that where other means of communication such as WhatsApp and Telegram are used, the 'without prejudice' phrase used at the beginning would also be enough to cover conversations made with respect to a negotiation or dispute settlement.

WHAT DOES 'WITHOUT PREJUDICE' COVER?

On the general discussion made above then, it means that any communication made, which includes the negotiation itself, any discussion, statement and communication related to the privileged communication cannot be reproduced in court to support a witness statement, attached as an exhibit, used in cross-examination or used as admissible evidence pertaining to hearsay evidence.

EXCLUSIONS AND EXCEPTIONS TO COMMUNICATIONS

1. When the negotiation under 'without prejudice' is successful, such correspondence is admissible as an evidence of conclusion of settlement agreement.
2. If there is evidence showing that there was a misrepresentation or fraud with respect to the settlement agreement, the 'without prejudice' exception would not apply.
3. Where the 'without prejudice' communication shows evidence of perjury or blackmail.
4. Where parties waive their right to reveal the communication, the exception will not apply.

*This list is not exhaustive however and the courts may admit 'without prejudice' communication based on the circumstances of the case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.