Ian Henderson & Anor v Ministry of Defence

Without prejudice privilege may be lifted only in exceptional circumstances where exclusion of the evidence would cloak unambiguous impropriety. The threshold remains deliberately demanding at a preliminary stage, and a conflict with a party’s open position does not suffice unless the privilege has been abused. A difference between a without prejudice costs schedule and a later bill does not establish impropriety where the schedule records costs actually incurred, the later bill narrows the inter partes claim, and there is no fundamental calculation error or misrepresentation. An isolated, corrected mistake did not alter that conclusion.

Ian Henderson and Jonathan McPherson brought separate military noise-induced hearing loss claims against the Ministry of Defence. After their claims settled, their solicitors, Hugh James, supplied detailed without prejudice costs breakdowns, principally to support payments on account. Later, certified bills claimed lower totals. The Ministry alleged that the discrepancies suggested misconduct under CPR 44.11 and sought to use the breakdowns in the detailed assessments. The parties agreed that the breakdowns were prima facie without prejudice documents. The costs judge considered whether they retained that protection and, if so, whether unambiguous impropriety allowed the Ministry to rely on them.

1. Preliminary issues decided for the claimants. The judge proceeded on the parties’ common position that the schedules had prima facie without prejudice status. The cited explanation in Schering Corporation v Cipla Limited, Neolab Limited [2004] EWHC 2587 (Ch) treated a without prejudice marking as an indication of an intention to negotiate.
2. The court should be slow to remove the protection afforded to without prejudice communications. The exception applies only where the privilege is abused and the evidence establishes unambiguous impropriety. A statement inconsistent with a party’s open position is insufficient unless it demonstrably abuses the privilege. The judge applied Unilever v Procter & Gamble [2002] 1 WLR 2436 and the demanding approach in Motorola Solutions Inc v Hytera Communications Corp Ltd [2021] EWCA Civ 11, including its confirmation that the test is not diluted at an interim stage.
3. On the evidence, the schedules recorded costs the claimants had actually incurred. The later bills were lower because costs lawyers exercised judgment to narrow the inter partes claims and anticipate assessment challenges. The second claimant’s schedule included costs of an unsuccessful disclosure application, but this was an isolated error that was corrected in the bill. The judge found no fundamental calculation errors, misrepresentation or intention to induce an overpayment. He accepted that the solicitors could have rationalised the schedules and alerted the Ministry to duplication or disproportionality when it began using them for substantive negotiations; that criticism fell short of impropriety under the Civil Procedure Rules r 44.11.
4. The judge distinguished McNamee v LB Brent [2025] EWHC 2612 (SCCO), where fundamental errors had produced a schedule grossly overstating the costs actually incurred. The claimants retained privilege, and the Ministry could not adduce or rely on the schedules at the detailed assessment. The part-heard assessment remained listed for 25–29 January 2027.