|[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]|
United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Brodie v Ward (t/a First Steps Nursery)  UKEAT 0526_07_0702 (7 February 2007)
Cite as:  UKEAT 0526_07_0702
[New search] [Context] [View without highlighting] [Printable RTF version] [Help]
|At the Tribunal|
|On 13 December 2007|
HIS HONOUR JUDGE BIRTLES
MRS R CHAPMAN
MR B R GIBBS
Transcript of Proceedings
|For the Appellant||MR MICHAEL REED
Free Representation Unit
6th Floor 289-293 High Holborn
|For the Respondent||MR CHRISTOPHER BRYDEN
Messrs Lyons Davidson Solicitors
87 Burlington Road
Practice and Procedure – without prejudice letter
The EAT held that the Employment Tribunal was correct in excluding a solicitor's without prejudice letter in other proceedings which the Appellant claimed was the "last straw" causing her to resign and claim constructive dismissal. The letter did not fall within any of the exceptions of the without prejudice rule.
HIS HONOUR JUDGE BIRTLES
"Nikki Ward has instructed us with regard to employment issues.
We note that you have made an application to The Employment Tribunal.
This firm acted for our client when she purchased First Steps Nursery School.
Specific enquiries were made of Claire Craddock as to whether staff had contracts of employment Mrs Craddock confirmed that no contracts had been issued, however, we understand that on the day of completion Mrs Craddock went ahead and issued a contract The contract purported to provide for an entitlement to six months full pay in the event of personal sickness, illness or injury. Our client played no part in agreeing employment terms and it is highly unlikely that an employer in such a small business would pay an employee six months full salary by way of sickness benefit. Our client suspects that Claire Craddock included sick pay provision that was not in force during any period of her ownership of the business.
Our client would like to resolve this matter once and for all. She is willing to pay you £4,140 in full and final settlement, in return for which your employment will terminate as soon as possible. The payment will be made pursuant to the terms of a Compromise Agreement. The Compromise Agreement will include provision for you to take independent legal advice and our client will contribute the sum of £200 plus VAT towards your legal costs. The £4,140 will be free of tax.
Please let us know within the next seven days whether you are prepared to accept the offer.
We look forward to hearing from you."
The Employment Tribunal judgment and order
The Notice of Appeal
"The "without prejudice" rule is a rule governing the admissibility of evidence and is founded upon the public policy of encouraging litigants to settle their differences rather than litigate them to a finish. It is nowhere more clearly expressed than in the judgment of Oliver L.J. in Cutts v. Head  Ch 290, 306:
"That the rule rests, at least in part, upon public policy is clear from many authorities, and the convenient starting point of the inquiry is the nature of the underlying policy. It is that parties should be encouraged so far as possible to settle their disputes without resort to litigation and should not be discouraged by the knowledge that anything that is said in the course of such negotiations (and that includes, of course, as much the failure to reply to an offer as an actual reply) may be used to their prejudice in the course of the proceedings. They should, as it was expressed by Clauson J. in Scott Paper Co. v. Drayton Paper Works Ltd. (1927) 44 R.P.C. 151, 156, be encouraged fully and frankly to put their cards on the table… The public policy justification, in truth, essentially rests on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of liability."
The rule applies to exclude all negotiations genuinely aimed at settlement whether oral or in writing from being given in evidence. A competent solicitor will always head any negotiating correspondence "without prejudice" to make clear beyond doubt that in the event of the negotiations being unsuccessful they are not to be referred to at the subsequent trial. However, the application of the rule is not dependent upon the use of the phrase "without prejudice" and 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 and cannot be used to establish an admission or partial admission. I cannot therefore agree with the Court of Appeal that the problem in the present case should be resolved by a linguistic approach to the meaning of the phrase "without prejudice." I believe that the question has to be looked at more broadly and resolved by balancing two different public interests namely the public interest in promoting settlements and the public interest in full discovery between parties to litigation."
Ground 1: dishonest exception
"As often happens in difficult cases two well established and valuable legal principles collide. One is that it is desirable that courts and tribunals should have all the available material before them with which to arrive at a just conclusion in accordance with law. The other is that it is desirable that parties should be in a position freely to negotiate a compromise of their disputes without having what they say in the course of those negotiations revealed subsequently and used against them in litigation or proceedings before a tribunal. There is inevitably going to be a contradiction or conflict where an admission, or a statement of present intention, is made which conflicts with the parties' pleaded case and we quite see that in the present circumstances there is going to be a difficult conflict between the proposition that the applicant's trust and confidence was destroyed in late April 1991 and remained destroyed to 13 May and on the other hand his willingness to continue as an employee if certain financial inducements were forthcoming. But the existence of the conflict is not of itself, in our view, sufficient to warrant our giving priority to the first of the two principles, namely, that the courts should have all available material before them, over the other, namely, protection for "without prejudice" correspondence. It seems to us, particularly having regard to the authorities that are collected in Mr. Foskett's book, that the yardstick that should be applied in this category of cases is whether the "without prejudice" material involves, if it is suppressed, something amounting to a dishonest case being prosecuted if the pleaded case continues. The nearest example amongst the quoted cases in Mr. Foskett's book, to which we were referred, is a decision of Mr. Anthony May Q.C., Hawick Jersey international Ltd. v. Caplan, The Times, 11 March 1988, and the account given of it is this:
"P claimed a repayment of a loan to D of £10,000 made by means of a cheque. D denied the transaction was a loan because he had supplied £10,000 cash. D secretly tape recorded a "without prejudice" meeting at which (a) P did not dispute and indeed accepted D's repeated assertions that the transaction was not a loan but one involving an exchange for £10,000 in cash and (b) P expressly or impliedly said that the proceedings were brought to persuade D to reach a fairer settlement or to settle other differences."
and Mr. May, sitting as a deputy judge of the Queen's Bench Division, held that P was threatening to persist with dishonest proceedings and accordingly that "without prejudice" privilege did not apply to the discussion. Other more extreme examples are given of threats in the nature of blackmail and other wholly undesirable and, indeed, criminal activities which cannot be indulged in cloaked under the privilege of "without prejudice".
We have therefore looked to see whether we are of the view that the exclusion of the "without prejudice" material and persistence in the applicant's case as pleaded in his originating application involves something in the nature of dishonest conduct on his part. Tested by that test we conclude that the material should remain hidden from the industrial tribunal because we do not think that there is dishonesty involved in such an attitude."
Ground 2: unambiguous impropriety
I am writing to tell you that I wish to raise a grievance. This action is with regard to the following circumstances;
Despite my original grievance with regard to the unlawful deduction of my wages dated 3rd November 2006, you have still failed and refused to pay me what I am entitled to under my Employment Contract dated 5th June 2001.
On account of this repudiatory breach of an express term of my contract and following from this a breach of the implied term of trust and confidence, I feel that I have had no option but to resign. I consider this resignation to be a constructive dismissal.
I am prepared to deal with this grievance in writing. If you agree, please confirm your agreement in writing that the modified procedure under the Employment Act 2002 (dispute resolution) regulations 2004 apply. I look forward to bearing from you with your response to my grievance."
"62. It is of course distasteful for this or any court to avert its eyes from an admission which, subject to any point about value, appears to incriminate Mr Fincken in lying in a sworn document. However, in the tension between two powerful public interests, it seems to me that that in favour of the protection of the privilege of without prejudice discussions holds sway - unless the privilege is itself abused on the occasion of its exercise.
63. I would therefore conclude that Ms Gloster is wrong to submit that the unambiguous impropriety exception is a broad and flexible rule which covers this case. It follows that the judge below and this court should never have known of the admission as to ownership of the shares relied on by SIB."
Mr Bryden further submitted that this was not a case where the Appellant was barred from putting forward the whole of her case i.e. one of constructive dismissal including reliance upon the "last straw" principle. Her objection is that she cannot present her case in the way that she would like to but that is simply the result of the without prejudice rule. He also referred us to Fazl-Alizadeh v Nikbin and Others (unreported 25 February 1993; Court of Appeal (Civil Division) Transcript No 205 of 993) which is referred to in the Savings & Investment Bank Ltd (in Liquidation)  1WLR 667 at pages 679-680 case paragraph 47 of the judgment of Rix LJ. Finally, Mr Bryden submitted that on the facts of this case the solicitor's letter of 27 January 2007 cannot possibly be unambiguous impropriety.