Brunel University & Anor v Webster & Anor

Without-prejudice privilege is not waived merely because settlement discussions are mentioned in an internal grievance process, even where participants include people brought into the privileged circle. Waiver must be consensual or bilateral, but it may be implied from objective conduct. A formal, adversarial process before an ostensibly independent panel, with both sides giving evidence about the negotiations, may be so inconsistent with confidentiality that waiver occurs. The same result may follow when both parties plead and rely on the material in tribunal proceedings. The Court of Appeal left open whether a separate exception applies in discrimination or victimisation claims, including the unambiguous-impropriety principle. It also confirmed that a new point may be entertained on appeal where it depends on facts found or not disputed, subject to the court’s discretion.

Professor Vaseghi and Ms Webster, employees of Brunel University, had brought earlier racial discrimination claims. Before those claims were heard, the parties held unsuccessful without-prejudice settlement discussions. After a university newsletter referred to the cost of defending the claims and alleged unwarranted demands for money, the employees brought victimisation claims.

The Employment Tribunal excluded some references to the negotiations but admitted the grievance panel’s reports on the basis of waiver and an alternative exception. The Employment Appeal Tribunal, in UKEAT030706DA, held that privilege had been waived and that the material was admissible under an exception. The University appealed, and the employees cross-appealed on waiver arising from the pleadings and disclosure. The central issues were whether privilege had been waived in the grievance process or tribunal proceedings and whether a discrimination-specific exception applied.

The University’s appeal was dismissed on the principal ground of bilateral waiver. The respondents’ cross-appeal was allowed, producing the same result.

1. Privilege and waiver. The court accepted that the without-prejudice rule is an evidential rule protecting negotiations genuinely aimed at resolving a dispute. Privilege does not depend on the use of a without-prejudice heading and continues after the underlying proceedings have ended. The authorities included Savings & Investment Bank Ltd (in liquidation) v Fincken [2004] 1 WLR 667, Chocoladefabriken Lindt v Nestle [1978] RPC 287 and Rush & Tomkins v GLC [1989] AC 1280.
2. Grievance hearings. Waiver must be consensual, but it may be express or implied from the parties’ conduct. The court accepted that an internal grievance meeting among persons within, or properly added to, the privileged circle would not ordinarily waive privilege. The statutory grievance process under the Employment Act 2002 did not, however, determine the character of the proceedings. Here, the University created an ostensibly independent panel of Council members who were not within the privileged circle. The hearings were formal and adversarial, evidence was called, findings were made, and both parties gave or called evidence about the negotiations.
3. Application to the facts. In those unusual circumstances, the proceedings were effectively a mini-trial of the victimisation issues. The EAT was entitled to conclude that the parties’ conduct was bilaterally inconsistent with maintaining privilege. The Court of Appeal rejected the criticism that the EAT had relied on the absence of a without-prejudice label.
4. Cross-appeal. The court exercised its discretion to hear the new waiver point because it depended on basic facts that were found or undisputed. By referring to the negotiations in their ET1s and witness statements, and by relying on the grievance reports in the ET3s, both sides indicated an intention to waive privilege. Bilateral waiver therefore occurred when the ET3s were lodged. Amendment might have withdrawn the waiver if sought promptly, but the University’s application was now too late because it would radically affect the proceedings.
5. Unresolved exception. It was unnecessary to decide whether a special exception to without-prejudice privilege applies in discrimination or victimisation proceedings. Any observations on the unambiguous-impropriety principle would have been obiter. The correctness of the remarks in BNP Paribas v Mezzotoro [2004] IRLR 508 was left for a case where exclusion of the negotiations had been clearly sought at an appropriate early stage.

1. Court of Appeal (Civil Division): [2007] EWCA Civ 482. The University’s appeal was dismissed on waiver grounds, and the respondents’ cross-appeal was allowed.
2. Employment Appeal Tribunal: UKEAT030706DA. The University’s appeal was dismissed. The EAT held that privilege had been waived and admitted the contested material under an alternative exception.
3. Employment Tribunal: The Tribunal excluded direct references to the negotiations but admitted the grievance panel’s reports on waiver and, alternatively, an exception to the privilege rule.