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Introduction
It is a well-established principle of English law that statements (whether oral or written) made as a genuine attempt to resolve a dispute are generally protected by “without prejudice” (WP) privilege and are, therefore, inadmissible in evidence. The public policy aim underpinning this principle is that it is desirable to encourage parties (or their legal representatives) to settle disputes without litigating, in part by providing that statements made in negotiations cannot subsequently be presented to a court as admissions. Discussions do not have to be “labelled” as WP, but it is common to do so that each party knows where they stand.
In the employment context, WP discussions have traditionally been used where an employer has decided to dismiss an employee, but wants to preclude the possibility of a subsequent claim from that employee. In such circumstances, the employer may offer the individual concerned a payment in exchange for a waiver of any claims that he/she may have arising out of the dismissal. However, the employer will want to ensure that any discussions concerning a deal of this type take place on a WP basis, so as to ensure that the individual cannot refer to them in the event that negotiations break down. Clearly, it could be very damaging for an employer’s case if a court or employment tribunal were to learn that it had sought to “buy off” a departing employee – an inference regarding the employer’s “guilt” might easily be drawn.
The protected status of WP negotiations has, though, come under attack from employment tribunals in recent years. In BNP v Mezzotero, a 2004 case, the Employment Appeal Tribunal held that the public interest in exposing unlawful discrimination in the workplace was even greater than that underpinning the WP rule. Accordingly, it ruled that discriminatory comments made in the course of WP discussions would be admissible as evidence. This approach was reaffirmed in a case decided towards the end of last year (Brunel University & another v Vaseghi & another).
The Case
In Brunel, two employees of Brunel University brought race discrimination claims against the University. Although there were settlement discussions immediately before the tribunal hearing, these failed and the cases went to tribunal where the employees lost. Some months later, the Vice Chancellor of the University wrote an article about the negative impact of the litigation on the University’s resources alleging that both claims had been “accompanied by unwarranted demands for money”. The employees brought grievances against the University in response to this statement, arguing that it was the University, and not they, that had initiated discussions about money. A grievance panel heard evidence about settlement discussions between the parties, and went on to reject the employees’ grievances. The employees subsequently brought claims of victimisation before an Employment Tribunal, and sought to disclose at the tribunal hearing evidence from their solicitor as to the content of the settlement discussions. The University argued that the solicitor’s evidence was “clearly without prejudice and plainly inadmissible”, an argument that the tribunal accepted. However, the tribunal also ruled that the grievance panel’s reports, which contained numerous references to the content of settlement discussions should be admitted as evidence, since the University had waived privilege by not objecting to the reference to those discussions at the grievance hearing.
The University appealed against the admission of the reports, whilst the employees cross-appealed against the refusal to admit the solicitor’s evidence. Dismissing the appeal and allowing the cross-appeal, The Employment Appeal Tribunal held that the settlement discussions were clearly WP, since they were an attempt to settle a dispute, but also ruled that “…in discrimination cases the necessity of getting to the truth of what occurred and if necessary eradicating the evil of discrimination may tip the scales against the necessity of protecting the “without prejudice” privilege”. Since the University had placed the issue of the settlement discussions into the public arena, and had not sought to “hide behind the cloak of privilege” before the grievance panel, it would be an abuse of privilege not to allow the employees to refer to those discussions in support of their victimisation claim.
Practical Points to remember
Brunel is the latest case highlighting the caution employers must exercise when conducting settlement discussions which it is intended will be WP, particularly in the context of discrimination disputes. However, there are a number of earlier authorities – many of which were considered and approved by the Court of Appeal in another case decided late last year (Chaudhary v Secretary of State for Health) – which also address limitations on WP privilege. Accordingly, employers are advised to keep in mind the following points in order to reduce the risk of their intended WP statements actually being used as evidence against them in a Court or Tribunal:
- Merely stating that a meeting, conversation or communication is WP does not mean that they will automatically be protected by WP privilege as a matter of law. There must be a pre-existing dispute between the parties, and the statements in issue must constitute a genuine attempt to resolve that dispute.
- The employee should genuinely consent to discussions being WP – a Court or Tribunal may deem this less likely to be the case where the employee has no prior warning about a meeting in which purported WP statements took place.
- WP privilege can be set aside where it would operate as a cloak for perjury, blackmail or other “unambiguous impropriety”. Discriminatory comments made in the context of WP discussions would certainly be admissible as evidence under the rule of unambiguous impropriety but, more generally, a Tribunal may be willing to look at evidence even if it appears to be WP, in order to get to the truth of the matter.
- There seems to be some dispute about whether the fact that WP communications have been referred to in an open judgement renders those communications admissible in a subsequent related dispute (Chaudhary suggests that it does not, whilst Brunel suggests that it does). In the circumstances, employers should be aware that there is a risk that their WP statements and admissions might be disclosable by an indirect route.
Nick Tsatsas
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Simkins' early warning bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.
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