Addleshaw Goddard

UK 200 2014 position: 22

Unambiguous impropriety, without prejudice and dispute identification: EAT decision upholds sanctity of negotiation confidentiality

In an appeal before the Employment Appeal Tribunal (EAT), HHJ Hand found that where the decision to dismiss the claimant for misconduct had already been taken, and negotiations were entered into regarding treating that dismissal as a redundancy, those negotiations were ‘connected to’ a dispute and therefore within the ambit of ‘without prejudice’ protection where marked appropriately. On the matter of unambiguous impropriety and its ability to invalidate a without prejudice mark, the EAT found that more than a disadvantage is needed to meet the threshold set by the Court of Appeal in Savings & Investment Bank Ltd (in liquidation) v Finken — the abuse should be approximate to ‘a blackmailing threat of perjury’ before the document can be admitted in proceedings (Portnykh v Nomura International plc).

It has long been the accepted position that for a negotiation to be kept between the parties on the basis of ‘without prejudice’ markings, there first had to be a dispute. Furthermore, if ‘without prejudice’ protection is used to conceal ‘unambiguous impropriety’, the document will lose the confidentiality usually afforded within litigation proceedings. The EAT had to consider both issues here in relation to a settlement negotiation: (i) when could the parties be considered ‘in dispute’; and (ii) how improper does behaviour need to be before it can be described as ‘unambiguous impropriety’? …

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