BNP Paribas Depositary Services Limited & Anor v Briggs & Forrester Engineering Services Limited

Without prejudice privilege is principally concerned with inter-party communications genuinely aimed at settling a dispute. It may extend to communications with a third party where the parties have mutually adopted the third party’s role as part of their agreed settlement mechanism. It does not generally protect internal documents or third-party communications created unilaterally to investigate a dispute or promote possible future negotiations. The question is assessed objectively, with careful regard to the policy promoting settlement and the countervailing need for relevant evidence to be available at trial. Documents not protected by privilege cannot acquire that status merely because they are later supplied under a letter marked without prejudice. Where documents should have been disclosed, the court will ordinarily refuse to restrain reliance on them merely because they were accessed through an irregular route.

The claimants, trustees of City Tower Unit Trust, brought proceedings concerning the termination and performance of a construction contract with the defendant, a building services supplier. The interlocutory application concerned 60 asbestos-related refurbishment and demolition survey reports commissioned by the claimants and later provided to the defendant’s solicitors through a password-protected link under conditions that they would not be relied upon at trial.

The claimants argued that the reports were protected by without prejudice privilege because they had been commissioned in the context of settlement negotiations, and that the defendant had agreed not to use them by accessing the link. The defendant disputed both propositions and relied on its disclosure rights. The issues were whether the reports attracted privilege, whether the access conditions were binding, and whether reliance should nevertheless be restrained.

1. The application was dismissed. The claimants were required to provide disclosure and inspection of the survey reports, and the defendant was not barred from relying on them at trial. Relevance and weight remained matters for the trial judge.
2. Without prejudice privilege is a rule of evidence founded principally on the policy of encouraging settlement. It is not a constitutional right equivalent to legal professional privilege. Its application must be determined objectively and proportionately, bearing in mind both settlement policy and the importance of relevant evidence being available to determine the truth: Rush v Tompkins, [1989] AC 1280; Barnetson v Framlington Group Ltd, [2007] EWCA Civ 502; Sang Kook Suh v Mace (UK) Ltd, [2016] EWCA Civ 4.
3. The privilege may extend beyond inter-party communications in a narrow penumbra. It can cover a report or third-party communication where the parties have mutually agreed or understood that the third party will perform a role forming part of the mechanism of their negotiations. Rabin v Mendoza & Co, [1954] 1 W.L.R. 271, was binding and correctly understood in that limited way.
4. A party’s unilateral commissioning of a survey does not attract privilege merely because the survey is intended to promote, assist or inform settlement negotiations. Nor is there a general privilege for internal or third-party documents generated to investigate a dispute or consider settlement options. The claimants had commissioned the survey without any crystallised mutual agreement or understanding with the defendant. The reports therefore fell outside the privilege.
5. The reports did not reveal the content of the earlier negotiations. A unilateral practical concession or step does not, without more, disclose what was said in negotiations. The reports were not made pursuant to the agreed dispute-resolution mechanism contemplated in Rabin.
6. The defendant did not accept the proposed contractual restriction by accessing the link. The more commercially likely construction of the letter was that it preserved privilege if privilege existed, rather than requiring an irrevocable waiver of reliance even if the documents were not privileged. In any event, it would have been contrary to public policy to enforce the latter construction in the circumstances.
7. As the reports were documents that should have been disclosed under the case-management order, it would have been unjust to prohibit reliance on documents to which the defendant was substantively entitled, merely because access was obtained through an inappropriate route.