Suh v Mace (UK) Limited [2016] EWCA Civ 4
Given the rising numbers of litigants-in-person in the civil justice system this case contains some helpful guidance on how the technicalities of without prejudice privilege apply where one side is not legally represented at negotiations.
In a nutshell, where a Court decides whether without prejudice privilege applies to evidence of any discussions in such a case, it should:
- Ask what was the purpose of the discussion or meeting, and in particular whether both parties were seeking to compromise the action (§§ 20 and 24);
- Take a broad approach and avoid dissecting a discussion into parts that are privileged and parts that are not, except in special cases (§§ 22 and 24);
- Only in the clearest cases of abuse of privilege (ie. blackmail, perjury or other clear impropriety) would privilege be lost as a result of the improper conduct (§ 26);
- If it is argued that a party has waived privilege by its conduct, what is required is a careful examination of the party’s conduct in the context of the purpose of the without prejudice privilege. A party does not waive privilege by responding to the other side’s decision to draw the Court’s attention to without prejudice material (§§ 37, 43 and 45).
The facts
The Defendant landlord’s solicitor, Ms Jackson claimed that during a meeting with one of the tenants of a commercial premises, Mrs Suh, the tenant admitted rent arrears that were in dispute when the landlord re-entered the premises and purported to forfeit the lease.
The Defendant sought permission to admit as evidence of the meeting. The Claimants argued that privilege attached to this information and that it had not been waived.
The tenants lost at first instance. The Judge found that the meeting was not without prejudice and therefore the information was not privileged. The Judge described Mrs Suh as having lied in the account she gave of the meeting at trial, denying that she made admissions.
The Claimants appealed against the decision on the grounds of serious procedural irregularity, due to the Judge’s ruling on the without prejudice point.
Discussion
Lord Justice Vos began by assessing the purpose of two meetings between Mrs Suh and Ms Jackson, which appeared to broadly concern negotiation of an out-of-court settlement.
The Court reminds us that starting point in law for determining when discussions are covered by the without prejudice privilege is from Lord Griffiths in Rush & Tomkins v. GLC [1989] 1 AC 1280 at pages 1299-1300. The rule prevents the admission of evidence concerning all negotiations “genuinely aimed at settlement”. This objective test is a broad one, to suit a variety of cases:
if it is clear from the surrounding circumstances that the parties were seeking to compromise the action, evidence of the content of those negotiations will, as a general rule, not be admissible at the trial
This has since been qualified by the recent case of Bodey J in BE v. DE [2014] EWHC 2318 (Fam) per Bodey J at paragraphs 20-22, which adds that both parties must realise or should have realised they were negotiating a settlement.
The Court of Appeal held that the Judge at first instance had taken too narrow a view of whether the discussions were covered by without prejudice privilege and rejected a similar argument advanced by the Defendant on appeal:
There is no justification for salami slicing the interviews into parts that were open and parts that were without prejudice. Such an approach would contravene the broad view required by the authorities which I have described.
The Court resolved the question of the existence of without prejudice privilege in favor of the Claimant tenants, as on the facts, both parties were genuinely seeking a resolution to the litigation.
Abuse of privilege
The Court went on to determine whether without prejudice privilege had been abused and therefore lost by Mrs Suh. Unilever Plc. v The Procter & Gamble Co. [2000] 1 WLR 2436 at page 2444F-H is authority for the proposition that without prejudice material may be admitted:
if the exclusion of the evidence would act as a cloak for perjury, blackmail or other “unambiguous impropriety”
A health warning follows:
the exception should be applied only in the clearest cases of abuse of a privileged occasion
The Defendants argued that Mrs Suh was using without prejudice negotiation to mask lies in her witness statement and pleadings. The Court disagreed. There was nothing arguably dishonest about Mrs Suh’s conduct during the negotiations in which, according to the landlord, she made admissions that were true. Simply denying alleged admissions did not fall within the type of conduct described by Unilever.
Waiver of privilege
Finally, the Court considered whether Mrs Suh had waived privilege by agreeing in later correspondence to put the disputed admissions before the Court. The landlord had waived privilege by filing a witness statement from Ms Jackson and making clear its intention to rely upon evidence of the discussions.
The Court examined the tenants’ conduct objectively and in context of the purpose (and policy) of without prejudice privilege. The question was would it be unjust for the tenants to claim that the admissions were covered by without prejudice privilege. This requires detailed analysis of the facts.
Waiver did not depend on whether the tenants knew of the existence of the without prejudice privilege at the time. The Court was concerned with justice and the protection of privilege, not the Parties’ awareness of the legal principles.
The Court acknowledged the difficulties faced by a party seeking to claim privilege when the other side has already put the privilege material before the Court. An unguarded response to privileged material should not be held against a party who seeks to claim privilege.