This was a preliminary hearing on whether correspondence between the parties should be regarded as inadmissible due to the ‘without prejudice rule’.  The claimant was employed by the respondent, a small technology company, as the Human Resources and Recruitment Co-Ordinator. After some family issues, an external Managing Director was appointed in 2019 and this is when the claimant alleges that there was maltreatment leading to sickness and never returning to work.  When the claimant was off work, the external Managing Director was removed and the family members were reinstated.

The issue arose from a letter from the family director, Michael Breach, to the claimant in June 2019.  This responded to the grievance issued and Mr Breach agreed that the treatment had been abject and he apologised for it.   Mr Breach also acknowledged that he was in some way culpable stating that it was a terrible lack of judgment to appoint the external Managing Director and that he accepted lies from the Managing Director in relation to the claimant.  He apologised stating that he was sorry that he could not undo what had already been done.  The final paragraph also stated that he understood if the claimant wished to take legal action but would appreciate if the claimant would first consider talking to him or his son about a private settlement. The claimant responded stating that she did intend to take legal proceedings when she felt better but preferred that Mr Breach set out what he would consider reasonable in relation to any private settlement.  There was no response from Mr Breach and the pleadings to the full case suggest that he has resiled from his apology.

The EAT had to determine whether the letters were without prejudice and were therefore inadmissible from the full hearing.  They referred to the leading House of Lords decision in Rush & Tompkins Ltd v GLC [1989] in which without prejudice communication is privileged with the aim of encouraging litigants to settle their disputes. For the without prejudice rule to apply there must be an existing dispute between the parties and the communication must be with a genuine attempt to settle the dispute.

In BNP Paribas v Mezzotero [2004] the mere issuing of a grievance is not sufficient for a dispute.  The ET held that both elements for the without prejudice rule to apply were not met.  There was only a grievance issued by the claimant which did not contain any threat of litigation.  There may have been the possibility of litigation in the background but it was not at a sufficient stage.  On the second point of attempting to resolve the dispute, the letter from Mr Breach largely contained a fulsome apology with only the last paragraph stating that he would not dissuade the claimant from taking legal action but that she should contact him about a private settlement.  This was not a genuine attempt to settle the matter as there was nothing put forward in form of a proposal or suggesting that a proposal would be forthcoming.  Therefore, the correspondence was not regarded as being without prejudice and could be used at a full hearing.

Practical Lessons

The use of without prejudice communication can be very useful to ensure that disputes are quickly resolved with limited costs to both parties.   However, employers will want to ensure that they do not give the claimant ‘a smoking gun’ when it comes to evidence if there is no settlement reached.  For this reason, it is important to ensure that the correspondence does relate to a real dispute and it relates to a genuine attempt to settle.  Greater protection can also come by labelling the correspondence as without prejudice.
https://assets.publishing.service.gov.uk/media/5ebd2f0686650c2791ec7137/Ms_J_Llewelyn_-v-_Oyster_Bays_Systems_Ltd_1602118.2019_-_Judgment_and_Reasons.pdf