St James's Place Wealth Management plc & Ors v Kevin Charles Dixon-Nutt

The without prejudice rule protects communications forming part of a genuine attempt to compromise a reasonably identifiable dispute between the parties. The question is assessed objectively, by examining the substance of the communication as a whole. A dispute about how to pay an admitted liability is not, by itself, a dispute to which the rule attaches. The court takes a broad and generous approach and will not dissect a negotiating meeting into protected and unprotected parts. Labels are unnecessary. The unambiguous impropriety exception concerns abuse of the protection when the communication is made; it does not arise merely because a party may later deny an admission. Nor is privilege waived merely because a party refers to the recording in a pleading, where the pleading read as a whole continues to assert privilege.

The parties brought two related claims arising from an agreement under which a financial adviser transferred his business to St James’s Place entities. The adviser sought fees, while the entities sought rescission and damages for alleged breaches and misrepresentations.

The entities relied on a covert recording of a meeting between the adviser, his former client and another business associate, together with subsequent emails. The adviser applied under CPR Part 3.4(2)(b) to strike out references to the material, contending that it was protected by the without prejudice rule. The central issue was whether the meeting involved a genuine attempt to compromise a dispute, rather than arrangements for repayment of admitted liabilities.

1. Application dismissed. The recording and emails were admissible because the without prejudice rule did not apply.
2. The rule requires a genuine attempt to compromise a dispute between the parties to the communication. The question is objective. The court may consider the transcript, documents, witness evidence and the participants’ subjective intentions, but those intentions must themselves be objectively assessed. The substance of the communication governs; no express without prejudice label is required.
3. The rule is broad and generous. Where a meeting is genuinely directed to settlement, the court should assess it as a whole and should not dissect it into protected and unprotected passages. An opening communication may be protected without prior negotiations, but a bare assertion of rights is not.
4. A dispute requires a reasonably coherent and definable issue. There was no such dispute here. The adviser did not dispute that he owed money to the former client and associate. The meeting concerned the assets available for repayment, the timing of repayment and arrangements for preserving confidentiality. A negotiation about payment of an admitted liability does not attract the rule, applying the principle in Bradford and Bingley Building Society v Rashid, [2006] 1 WLR 2066.
5. The same conclusion applied to the emails. They acknowledged the underlying liabilities and discussed repayment. The meeting’s threatening and coercive character did not create a dispute where none otherwise existed.
6. The alternative arguments also failed. Referring to the recording in the defence did not waive privilege, since the defence read as a whole continued expressly to assert it. The unambiguous impropriety exception would not apply merely because the adviser might later deny admissions. The impropriety must relate to the claim for protection itself, such as using the privilege as a cloak for perjury or blackmail.