The Gazette 1991

g a z e t t e

april

1991

hea r i ng, a c omp r om i se was reached between the plaintiff and the first-named defendant on the basis of negotiations wh i ch had been undertaken " w i t h o ut pre- j u d i c e " . The s e c o nd n amed defendant, convinced that these negotiations must have disclosed matters relating to the valuation of their claim, sought discovery of these settlement documents and this was contested by the plaintiffs who argued t hat the w i t h o ut prejudice nature of the documents protected them from discovery. The House of Lords first addressed the admissibility of such documents in the litigation w i th the second named defendant and, in deciding this issue, had to balance the public policy of encouraging amicable settlement of disputes against the requirement t hat evidence be admitted where the justice of the case so requires. 24 The House of Lords (overruling the Court of Appeal) decided in favour of the plaintiff contractor, Lord Griffiths holding that " . . . as a general rule the w i t hout prejudice rule renders inadmissable in any subsequent litigation connected w i th the same subject matter proof of any admi ss i ons made in a genuine attempt to reach a settlement. It of course goes w i t hout saying that admissions made to reach settlement w i th a different party within the same litigation are also inadmissible whether or not settlement was reached w i th that pa r t y " . 2 5 In reaching such a conclusion, the House of Lords clearly favoured the public policy objective of u n i n h i b i t ed o p p o r t u n i t i es for dispute settlement " . . . the general public policy that applies to protect genuine negotiations f r om being ad- missible in evidence should also be extended to protect those negotiations from being dis- coverable to third parties". 26 It is submitted that this decision does not amount to a deviation from the principle that the w i t hout prejudice protection disappears once settlement is reached; rather it redefines that principle so as to remove the protection only inter partes. Clearly there has been no such settlement between the third party and the party to the settle- ment against wh om he is still in

contention and so, in relation to the dispute between these parties, the " . . . the House of Lords clearly favoured the public policy objective of uninhibited opportunities for dispute se t t l emen t . . ." without prejudice protection should remain. 27 What, therefore, is the signifi- cance of the removal of the without prejudice label following settlement if it only applies as between the parties to that settlement? First, as illustrated in Bentley -v- Nelson (1963), 28 this rule prevents a party to the settlement from taking legal action in contradiction to the terms of the settlement and thereafter relying on these words to prevent the terms or the fact of the settlement being disclosed to the court. Secondly, the continuation of the w i t hout prejudice protection as against third parties may in itself be of limited extent, Lord Griffiths confining it to " . . . any subsequent litigation c o n n e c t ed w i t h the same subject matter" As such, his Lordship envisaged that in litigation involving different subject matter, the "w i t hout pre- judice" protection might well be lost. (d) STATEMENTS MUST RELATE TO THE DISPUTE IN HAND. Cross 29 states " . . . the statement in respect of wh i ch privilege is claimed must have some bearing on negotiations for a settlement". TURKS AND CAICOS ISLANDS AND THE ISLE OF MAN Samuel McCleery Attorney - at • Law and Solicitor of PO Box 127 in Grand Turk.Turks and Caicos Islands, British West Indies and at 1 Castle Street, Castletown, Isle of Man will be pleased to accept instructions generally from Irish Solicitors in the formation and administration of Exempt Turks and Caicos Island Companies and Non - Resident Isle of Man Companies as well as Trust Administration G. T Office:-

of " a separate and severable question". 22 (ii) THIRD PARTIES Negotiations wh i ch have taken place between A and B on a " w i t h o ut prejudice" basis may have resulted in the settlement of their differences. However, one or both of these parties may continue t o be in d i s p u te w i t h C in connection w i th the same subject matter and negotiations w i th C may have been un s u c c e s s f ul resulting in resort to litigation. Will w i t hout prejudice communications made for the purpose of com- promise in the settled action be discoverable and admissible by C in litigation against either A or B or vice versa? This was discussed in Rush and Tompkins Ltd. -v- Greater London Council and Another (1988). 23 The plaintiff builders entered into a construction contract w i th the first named defendant. The second named defendant, P.J. Carey Plant Hire (Oval) Limited, was a sub- contractor. A dispute arose bet- ween the parties in that the sub- contractor sued the plaintiff for loss and expense suffered due to delay and disruption. The plaintiff contended that they were entitled to have these sums reimbursed by the first defendant (GLC). Negotiations having failed, the plaintiff commenced proceed- ings in order that the amount due to the second named defendant might be established and also sought a declaraction as to their right to be reimbursed by the first named defendant. Prior to the FAMILY LAW REFORM/ JUDICIAL SEPARATION Do you have clients who are separating? Could you use a reliable, professional referral resource? Maura Maguire, M. Soc. Sc. (Psychotherapy) is a practising marital and family therapist with wide experience in the area of marital separation and mediation counselling. She is an Associate with Ceann Consult and is available for appointments at: Ceann Consult Ltd., Heritage House, 23 SL Stephens Green, Dublin 2. Tel: 01 766333 Fax: 01766123

Tel: 809 946 2818 Fax: 809 946 2819 I.O.M.Office:- Tel: 0624 822210 Telex : 628285 Samdan G Fax: 0624 823799

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