The EAT overturned an employment judge’s conclusion that there was no extant ‘dispute’ capable of attracting ‘without prejudice’ privilege. What is interesting is the broad approach that the EAT takes to the question of what amounts to a dispute, so as to engage the rule. A number of points arise. First, the question is merely whether at the time of the communications the parties might reasonably have contemplated litigation if they could not agree (relying on the CA case of Framlington Group Ltd v. Barnetson  IRLR 598); it is more a question of whether there is a “potential dispute”, as the EAT put it, rather than whether there was an actual dispute at the time. Secondly, one should not try to separate out statements comprising the communication, allowing some to be protected by privilege but not others (relying on the CA case of Unilever v. Proctor & Gamble Co  1 WLR 2436). Thirdly, it may even be possible that the parties can agree that a communication should be without prejudice even if there is no dispute, although it was not necessary to decide the point in the present case. Fourthly, note that in this case the line between what was held to be without prejudice or not did reflect the use of the ‘without prejudice’ label in correspondence. Whilst labelling is not decisive in itself, it serves as a useful reminder to be clear on the intended status of correspondence.
It is worth seeing how these expansive principles operated on the (commonly found) facts of the case in question. The EAT stated that if an employer announces an intention to dismiss the employee for misconduct and there are then discussions about an alternative manner of departure, it seemed “beyond argument” that there is either a “present dispute” or the potential for a “future dispute”. It is not necessary for any proceedings to be extant, nor for any specific complaint of, for example, unfair dismissal to have been raised, for there to be a potential dispute. This low bar, in contrast to Mezzotero, where even a grievance did not represent sufficient dispute so as to engage the privilege, significantly broadens the applicability of without prejudice protection.
The case is also useful for underscoring that the ‘unambiguous impropriety’ exception really is a very demanding test indeed, and it is not nearly enough merely to point to prejudice on the part of the party that wants to rely on the excluded evidence.
Notwithstanding the above principles, from the point of view of good practice, there is still a lot to be said for starting off without prejudice negotiations in writing, even if only to see if the employee is content to agree to a without prejudice meeting to discuss the matter. This should minimise the possibility for a dispute on the facts as to who agreed to talk and on what basis. Otherwise, it is more likely that this issue and any question about the applicability of the unambiguous impropriety exception would need to be resolved at a preliminary hearing to decide if the communications were in fact covered by privilege, in advance of the trial.