'Without Prejudice' Communications

Much like buses, we hear nothing on this subject for years, and then the Court of Appeal hands down two decision in rapid succession (see earlier bulletin on 28/5/07).

This time, the Court of Appeal shies away from the unworkable BNP Paribas v Mezzotero principle - not, of course, that it says so.

In Framlington Group v Barnetson, the Claimant (a senior executive) was negotiating terms of early departure with his employer. No litigation had been threatened.

The Court of Appeal held, overturning the judge, that the discussions were covered by the 'without prejudice' rule. Whilst not overruling Mezzotero, Auld LJ emphasised the desirability of allowing parties to attempt to settle prospective litigation. He expressly held that there is no special rule applying to employment litigation (para. 31), where early settlement of disputes is as important as in any other area of law.

According to Auld LJ, "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." (para. 34)

Note that the issue as to 'without prejudice' status does remain fact-sensitive. Where there is no real risk of termination (and an employment claim flowing from termination), it is unlikely that communications will fall under the 'without prejudice' banner.