The rules relating to without prejudice discussions in England were looked at in the recent case of Suh v Mace (UK) Limited. In this case, the Court of Appeal reversed a County Court decision admitting evidence of admissions made by one of the claimants in a meeting with the defendant’s solicitor. Even though the purpose of the meeting was not clear, the judgement gives a broad interpretation to the rule that communications genuinely aimed at settlement are without prejudice.

Background    
The case involved a couple, the claimants, who operated a restaurant. Their landlord, the defendant, re-entered the premises with almost nine years left on the lease and brought it to an end. In response, the claimants raised an action for damages claiming that the defendant had acted unlawfully. The defence to the action was that the claimants were in arrears with their rent. The claimants denied this.

Before the matter came to trial, one of the claimants made contact with the defendant’s solicitor and requested a meeting. As the claimants were representing themselves at this stage, the defendant’s solicitor agreed. At the meeting, the defendant’s solicitor asked the claimant the purpose of the meeting and was told that the claimant wanted to know what was happening in the case. The solicitor then took the claimant through various court documents and asked her about them, noting down the Claimant’s admission that she and her husband were, in fact, in arrears. Later in the meeting, a friend whom the claimant had brought to the meeting asked how the claimant could “get out of this matter”. The defendant’s solicitor suggested that the defendant would be reasonable in negotiations.

No agreement was reached and when the action came to court the defendants sought to have evidence of this meeting, including the claimant’s admissions, admitted as evidence in the form of a witness statement from the solicitor. At first, the claimants’ response was to deny that the admissions had been made and it was only later that they raised the argument that the meeting had been without prejudice. This argument was heard by the County Court and rejected. The claimants appealed to the Court of Appeal.

The Argument    
In the Court of Appeal, the claimants renewed their arguments that the meeting was without prejudice. The defendant’s main argument in response was that the meeting was not aimed at settlement. The defendant also argued that, even if it had been, the statement was not privileged as the admissions were an abuse of privilege. Finally, the defendant argued that the claimants had waived any privilege by their delay in raising it when the evidence was introduced. 

The test in England for whether communications are without prejudice and therefore privileged is whether they are part of discussions genuinely aimed at settlement. The Court of Appeal looked at Supreme Court authority and found that this test should be applied broadly. While noting that it can be more difficult to determine the purpose of discussions when parties are representing themselves, the Court found that, as the Claimant had not been seeking legal advice from the defendant’s solicitor and there was no other explanation for the meeting, it could only have been a meeting seeking settlement of the claim. This interpretation was supported by the fact that the claimant had used the meeting to ask, through her friend, how she could get out of the matter. The fact that this came after the admissions was not important as it was the claimant’s first unprompted statement during the meeting. In any case, the Court held that it would not be helpful to “salami slice” meetings. The Court therefore found that the meeting was held without prejudice and that the evidence was privileged.

Having found this, the Court also rejected the defendant’s other arguments. In relation to the claim that the claimant had abused the rules relating to privilege, Lord Justice Vos said “I do not think there is any evidence to suppose that Mrs Suh even knew what the term “without prejudice” meant, let alone that she was calculating the use of it to tell lies…Even more importantly in this regard, however, Mrs Suh did nothing even arguably dishonest in the course of the privileged discussions. It is the landlord’s case that she told the truth.” When considering whether the claimants had waived privilege, the Court held that any waiver would need to be clear. While the tenants’ delay in raising the issue of privilege in response to the landlord’s introduction of evidence of the meeting was “unguarded”, it would be unjust to hold that this amounted to a waiver.

On these grounds the Court ordered a retrial excluding the without prejudice admissions.

Analysis
The rules governing when privilege attaches to communications made in an attempt to reach a settlement are different in England and Scotland. In Scotland, as set out in Daks Simpson Group plc v Kuiper and approved in Richardson v Quercus Limited, the focus is on the content of the particular statement so a clear admission of facts can be admitted even if it is within the context of settlement discussions. In England, however, as we see in this case, there is a broader approach which focuses on the context of discussions. As long as any admission is made in the context of discussions seeking to settle a case, it will not be admissible unless it falls within one of the exceptions outlined above. 

 

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