In two recent judgments, the Court of Appeal has clarified the law on 'without prejudice' communications in an employment context.
The 'without prejudice' rule relates to written or oral communications made as part of negotiations genuinely aimed at settlement. Such discussions are not usually admissible as evidence in subsequent litigation, so that the parties feel able to make concessions without these later being used against them at trial.
In Brunel University -v- Webster & Vaseghi the Court of Appeal considered whether the parties had waived privilege by referring to without prejudice discussions which had taken place in relation to a separate discrimination claim. Professor Vaseghi and Ms Webster, both employees at Brunel University, brought discrimination claims against their employer. After the University Vice Chancellor published articles referring to employees demanding unreasonable amounts of compensation in discrimination claims, they also brought claims for victimisation, arguing that they had been laid open to ridicule and subjected to a detriment as a result of their original discrimination actions.
Certain without prejudice discussions had been held in relation to the discrimination disputes, and Brunel argued that the employees could not rely on these for the purposes of their victimisation claims.
However, both parties referred to the discussions in the papers they submitted to the Employment Tribunal and, when first advised of the potential victimisation claim, the University set up grievance meetings and hearings where the settlement discussions were examined to determine exactly what had happened.
The University argued that no outside parties had been involved in these hearings so this was not sufficient to waive privilege, but the Court of Appeal held that in this case, the University had set up something quite different from the usual grievance meeting. Its panel was made up of persons who knew nothing about the dispute or the people involved in it, and its function was to act as an independent adjudicator, in effect holding a trial of the victimisation dispute. The Court of Appeal held that privilege had been waived in these circumstances.
In Framlington Group v Barnetson, decided just two weeks after the Brunel case, the Court of Appeal considered a situation where the Claimant had been negotiating departure terms with his employer. Litigation had not been threatened and it was therefore argued that no privilege attached to the discussions (since it is only engaged where there is a dispute between the parties).
The Court of Appeal held that the discussions were privileged, stating that there is no special rule applying to employment litigation. Early settlement of employment disputes is as desirable as in any other area of law and "the crucial consideration would be whether in the course of negotiations the parties contemplated or might reasonably have contemplated litigation if they could not agree." (Auld LJ).
Questions of whether discussions are without prejudice and whether privilege may have been waived remain fact-sensitive, but it should be borne in mind that if there is no real risk of a claim flowing from termination it is unlikely that discussions will be protected by the 'without prejudice' rule.
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