The Gazette 1991

a p r i l 1991

g a z e t t e

Without prejudice or without effect? Part 2

It is without doubt that the courts have sometimes given protection without the express use of the "magic formula" and it is therefore essential to consider the manner in which such an intention may be expressed and reasonably contemplated if the precise words are not used. One context in which the courts have been asked to consider this question is where the words are by Thomas Courtney, B.A., LL.B, & Nuala Jackson, B.A. (Mod), LL.M., B.L. used in the initiating document and a course of correspondence follows thereafter; is the initial expression of the words sufficient to evince an intention to protect later docu- ments in the same course of negotiations even if the words are not specifically used in the later documents? It would appear from the authorities that if the course of negotiations is commenced with- out prejudice, this protection will be sufficient to cover subsequent discussions. 39 An exception to this rule would be where there is a clear break in the chain of corres- pondence. 40 However, such a break merely means that a renewed expression of intention and reason- able contemplation is required if protection is to exist in relation to this new chain of correspondence. It would further appear that it may be possible to benefit from the protection retrospectively where the position has been rapidly rectified: (1877). 41 Halsbury states that the juridical basis of the possible retrospective use of these words is " . . . if a communication is

3. THE BASIS UPON WHICH THE RULE IS FOUNDED It is submitted that the without prejudice rule is founded upon public policy. The intention of the offeror that the communications in question should not be admissible against his must be coupled with an actual or constructive recog- nition on the part of the offeree to this end. The public policy reasoning is clear and has been referred to previously. Likewise, that the rule reflects the intentions of the parties has been accepted in several judicial dicta. 36 However, if the foundation stone of the rule is the parties' intention and the recognition of same, it is submitted that so long as this intention/ recognition is found, the use of the express words "without prejudice" is not necessary. However, it is plausible that cases may arise where the words are not used and, yet, the privilege will be conferred. Paradigm cases involved a series of letters, the first and perhaps some subsequent are headed "without prejudice", but one or more are not. In such a case, what some writers call an "implied without prejudice", comes into play. The intention must be on the part of the offeror with . . an 'implied without prejudice' [may come] into play." public policy dictating that the offeree must not unreasonably disregard this intention by seeking to admit the documents in question. 37 However, once the conditions for the privilege to attach have been met, waiver will only be possible with the consent of both. 38 Clearly the offeree must have reasonable notice of this intention. Using the words "with- out prejudice" is the most straightforward way of bringing such an intention to the notice of the other side. But there are alternative methods.

intended to be "without pre- judice", and is accepted by the other party as such, then the privilege attaches". 42 However, judicial dicta in cases where this has been considered, seem to view the second letter, attempting to attach the privilege, as merely a postscript to the earlier letter. This would mean that the time lapse between them would need to be extremely short so that the two could effectively be read as one. The former rationale, as expressed by Halsbury, would appear to permit a greater time lapse between the relevant communications. This issue was considered by the English Court of Appeal in Oliver -v- Nautilus Steam Shipping Company.* 2 The plaintiff had suffered an injury in the course of his employment. It was con- tended that he should be barred from claiming compensation for his injuries on the basis that he had accepted weekly payments made to him by his employer. The evidence was that the first such payment had been accepted unconditionally but that the second and subsequent payments had been accepted on a "without prejudice" basis. Nevertheless, the court was prepared to hold that the privilege attached to all of the payments. That the court so held was clearly based on the view that this was the intention of the parties. Romer L.J. stated " I think the second payment and subsequent payments, which were made expressly without prejudice, shew, under the circumstances, that the parties must, as between themselves, have treated the first payment as not having irrevocably bound the workman, but, for the purpose I am now considering, as having been made also wi t hout prejudice". It would further appear that, 119