The claimant was a director of the employer’s company. He claimed that the relationship of trust and confidence with the company had been undermined so far as to be a repudiatory breach of the contract. Before his complaint of unfair dismissal, he wrote without prejudice to the employers offering to stay a full time employee with a payment for ceasing to act as a director. At an interlocutory hearing the Chairman refused to admit the letter in evidence. The employers appealed saying that the ‘without prejudice’ letter was inconsistent with the his assertion that the relationship of trust and confidence had been undermined and that it should be admitted as an exception to the general principle of exclusion.
Held: The employee’s appeal failed. The principles for excluding ‘without prejudice’ correspondence in a Court applied equally to proceedings in Industrial Tribunals. The letter would only be admissible if it came within a recognised exception to the general principle, namely that there would be an abuse of the rule if it was applied to exclude the ‘without prejudice’ correspondence. The appropriate test was whether, if the ‘without prejudice’ material were suppressed, something amounting to a dishonest case would be prosecuted, and that since there was no such dishonesty in the present case, the privilege should remain.
Knox J said: ‘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 andpound;10,000 made by means of a cheque. D denied the transaction was a loan because he had supplied andpound;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 andpound;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.’
 UKEAT 279 – 92 – 2606,  ICR 1
Industrial Tribunals (Rules of Procedure) Regulations 1985 (SI 1985 NO 16)
Cited – BNP 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, . .
Cited – Brodie 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 . .
Cited – P v West Dorset General Hospital NHS Trust EAT 9-Jun-2004
EAT Practice and Procedure – Postponement or stay – Application for stay of ET proceedings pending GMC professional misconduct hearing refused. No error of law; if so; stay appropriate. . .
These lists may be incomplete.
Updated: 18 January 2021; Ref: scu.210996