Cutts v Head and Another: CA 7 Dec 1983

There had been a trial of 35 days regarding rights of way over land, which had proved fruitless, and where some orders had been made without jurisdiction. The result had been inconclusive. The costs order was now appealed, the plaintiff complaining that the judge had failed to take into account an offer of settlement made by him before trial.
Held: The principles of Calderbank should be of general application, and not just within matrimonial proceedings.
Oliver LJ discussed the attempt to apply the without prejudice rule: ‘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.’
and ‘As a practical matter, a consciousness of a risk as to costs if reasonable offers are refused can only encourage settlement whilst, on the other hand, it is hard to imagine anything more calculated to encourage obstinacy and unreasonableness than the comfortable knowledge that a litigant can refuse with impunity whatever may be offered to him even if it is as much as or more than everything to which he is entitled in the action.’

Oliver LJ, Fox LJ
[1984] Ch 290, [1983] EWCA Civ 8, [1984] 2 WLR 349, [1984] 1 All ER 597
England and Wales
CitedCalderbank v Calderbank CA 5-Jun-1975
Letter Without Prejudice Save as to Costs
Husband and wife disputed provision under 1973 Act, and a summons under section 17 of the 1882 Act. The wife had offered to transfer a house to H occupied by his mother, worth about pounds 12,000, in return for him leaving the matrimonial home. He . .
CitedScott Paper Co v Drayton Paper Works Ltd 1927
Parties to litigation should ‘be encouraged fully and frankly to put their cards on the table.’ . .
CitedWalker v Wilsher CA 1889
Letters or conversations which were written or declared to be ‘without prejudice’ may not be taken into consideration in determining whether there is good cause for depriving a successful litigant of his costs.
Lord Esher MR said: ‘The letters . .
CitedHoghton v Hoghton CA 16-Apr-1852
When a person has made a large voluntary disposition the burden is thrown on the party benefitting to show that the disposition was made fairly and honestly and in full understanding of the nature and consequences of the transaction. Romilly MR . .
CitedIn Re Daintrey, Ex Parte Holt QBD 8-May-1893
The court was asked whether a letter could be admitted in evidence and relied upon as an act of bankruptcy. The letter was sent by the debtor to the creditor at a time when there was no dispute, headed ‘without prejudice’. It contained an offer of . .
CitedStotesbury v Turner 1943
Without prejudice negotiations are, as a matter of public policy, to be protected from disclosure to the court seized of the dispute. An arbitrator has the same discretion as to costs as has a High Court judge. . .
CitedTomlin v Standard Telephones and Cables Ltd CA 1969
Without prejudice material can be admitted if the issue is whether or not the negotiations resulted in an agreed settlement. Without considering the communications in question it would be impossible to decide whether there was a concluded settlement . .
CitedMcDonnell v McDonnell CA 1977
In family proceedings, a costs letter had been written in the form suggested in Calderbank.
Held: The court accepted and endorsed the practice suggested by Cairns LJ. Ormrod LJ said: ‘The important factor which distinguishes this case is the . .
CitedPotter v Potter FD 1982
The court considered the admissibility of without prejudice correspondence on costs decisions. . .
CitedJones v Foxall CA 27-Mar-1852
Romilly MR deplored attempts to convert offers of compromise into admissions of acts prejudicial to the party making them, saying: ‘I find that the offers were in fact made without prejudice to the rights of the parties; and I shall, as far as I am . .
CitedTransmountana Armadora v Atlantic Shipping 1978
Donaldson J discussed the nature of a sealed offer in arbitration proceedings: ‘Although the respondents’ offer of settlement has been referred to as an ‘open offer’, this is a misnomer. Offers of settlement in arbitral proceedings can be of three . .
CitedArchital v Boot Construction 1981
. .
CitedCutts v Head and Another CA 7-Dec-1983
There had been a trial of 35 days regarding rights of way over land, which had proved fruitless, and where some orders had been made without jurisdiction. The result had been inconclusive. The costs order was now appealed, the plaintiff complaining . .
CitedComputer Machinery v Drescher ChD 1983
Sir Robert Megarry VC said: ‘For reasons that will appear, I think that I should pause in my recital of the facts in order to say something about these two cases. For a long while it has been settled law that if letters written ‘without prejudice’ . .
CitedIn re D (J) ChD 1982
The patient, a widow had five children. After she became a mental inpatient the court was asked to draft a statutory will.
Held: The court emphasised the need to provide full details of the estate assets and family background. An order that a . .
CitedRabin v Mendoza and Co CA 1954
The plaintiffs sued the defendants for negligence in surveying a property. Before the action commenced a meeting had taken place between the plaintiffs’ solicitor and a partner in the defendants’ firm of surveyors to see if the matter could be . .

Cited by:
CitedBerry Trade Ltd and Another v Moussavi and others CA 22-May-2003
A defendant appealed against an order admitting as evidence, records of ‘without prejudice’ conversations.
Held: Written and oral communications, which are made for the purpose of a genuine attempt to compromise a dispute between the parties, . .
CitedNorris v Norris, Haskins v Haskins CA 28-Jul-2003
The court considered how orders for costs were to be made in ‘big money’ cases.
Held: There were two sets of rules. Cases should be considered by first applying the Civil Procedure Rules. This would allow the court to consider the full range . .
CitedButcher v Wolfe and Another CA 30-Oct-1998
The parties had been partners in a family farm. On dissolution there was a dispute as to apportionment of costs. An offer had been ‘without prejudice save as to costs’.
Held: Costs may be denied to a plaintiff who had received a Calderbank . .
CitedPrudential Insurance Company of America v Prudential Assurance Company Ltd CA 31-Jul-2003
The appellant sought to restrain the use in proceedings in New Zealand and elsewhere of ‘without prejudice’ documents discovered in court proceedings here.
Held: It was not sensible to elide the distinction between the two sources of . .
CitedSavings and Investment Bank Ltd (In Liquidation) v Fincken CA 14-Nov-2003
Parties to litigation had made without prejudice disclosures. One party sought to give evidence contradicting the dsclosure, and the other now applied for leave to amend based upon the without prejudice statements to be admitted to demonstrate the . .
CitedMuller and Another v Linsley and Mortimer (A Firm) CA 8-Dec-1994
The plaintiff sued his former solicitors for professional negligence. The damages he sought to recover related to loss he suffered when dismissed as a director of a private company leading to a forced sale of his shares in the company. The plaintiff . .
CitedReed Executive Plc, Reed Solutions Plc v Reed Business Information Ltd, Reed Elsevier (Uk) Ltd, Totaljobs.Com Ltd CA 14-Jul-2004
Walker v Wilshire still Good Law
After successfully appealing, the defendant claimant argued for a substantial part of its costs, saying that the defendant had unreasonably refused ADR. To pursue this, it now sought disclosure of the details of the without prejudice negotiations . .
CitedCrouch v King’s Healthcare NHS Trust CA 15-Oct-2004
The defendants sought approval of their practice of making a written offer to the claimants rather than making a payment into court. The offer had been accepted but only after the defendant had purported to withdraw it.
Held: ‘it certainly is . .
CitedRush and Tompkins Ltd v Greater London Council and Another HL 1988
Use of ‘Without Prejudice Save as to Costs”
A sub-contractor sought payment from the appellants under a construction contract for additional expenses incurred through disruption and delay. The appellants said they were liable to pay the costs, and were entitled to re-imbursement from the . .
CitedBradford and Bingley Plc v Rashid CA 22-Jul-2005
The claimant sought recovery of a shortfall having sold the defendant’s house for a sum insufficient to clear the mortgage debt, and produced two letters which they claimed acknowledged the debt and restarted the limitation period running. The . .
CitedBradford and Bingley Plc v Rashid HL 12-Jul-2006
Disapplication of Without Prejudice Rules
The House was asked whether a letter sent during without prejudice negotiations which acknowledged a debt was admissible to restart the limitation period. An advice centre, acting for the borrower had written, in answer to a claim by the lender for . .
FollowedDaks Simpson Group plc v Kuiper 1994
The creditor sought summary judgment for an account for commissions earned. In a ‘without prejudice’ letter the defendant’s director said that he was prepared to accept that he had received such commissions in stated amounts.
Held: Lord . .
CitedFramlington Group Ltd and Another v Barnetson CA 24-May-2007
The defendant had sought an order requiring the claimant to remove from a witness statement elements referring to without prejudice discussions between the parties before litigation began.
Held: The defendant’s appeal succeeded. The test for . .
CitedCutts v Head and Another CA 7-Dec-1983
There had been a trial of 35 days regarding rights of way over land, which had proved fruitless, and where some orders had been made without jurisdiction. The result had been inconclusive. The costs order was now appealed, the plaintiff complaining . .
CitedBrown v Rice and Another ChD 14-Mar-2007
The parties, the bankrupt and her trustee, had engaged in a mediation which failed at first, but applicant said an agreement was concluded on the day following. The defendants denied this, and the court as asked to determine whether a settlement had . .
CitedRush and Tomkins Ltd v Greater London Council HL 3-Nov-1988
The parties had entered into contracts for the construction of dwellings. The contractors sought payment. The council alleged shortcomings in the works. The principal parties had settled the dispute, but a sub-contractor now sought disclosure of the . .
CitedBNP Paribas v A Mezzotero EAT 30-Mar-2004
EAT Appeal from ET’s decision, at directions hearing, permitting evidence to be adduced, at the forthcoming hearing of a direct sex discrimination and victimisation complaint, of the Applicant’s allegation that, . .
CitedOfulue and Another v Bossert HL 11-Mar-2009
The parties disputed ownership of land, one claiming adverse possession. In the course of negotations, the possessor made a without prejudice offer to purchase the paper owner’s title. The paper owner claimed that this was an acknowledgement under . .
CitedOceanbulk Shipping and Trading Sa v TMT Asia Ltd CA 15-Feb-2010
The parties had settled their disagreement, but now disputed the interpretation of the settlement. The defendant sought to be allowed to give in evidence correspondence leading up to the settlement which had been conducted on a without prejudice . .
CitedBrodie v Ward (T/A First Steps Nursery) EAT 7-Feb-2007
EAT 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 . .
CitedOceanbulk Shipping and Trading Sa v TMT Asia Ltd and Others SC 27-Oct-2010
The court was asked whether facts which (a) are communicated between the parties in the course of without prejudice negotiations and (b) would, but for the without prejudice rule, be admissible as part of the factual matrix or surrounding . .
CitedBerkeley Square Holdings and Others v Lancer Property Asset Management Ltd and Others ChD 1-May-2020
Application by the Claimants to strike out parts of the Defence as an abuse of process and an application by the Defendants to amend their Defence. However, both applications turn on the question whether certain facts on which the Defendants seek to . .

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Litigation Practice, Costs

Leading Case

Updated: 10 December 2021; Ref: scu.182471