The High Court has held that correspondence marked “without prejudice save as to costs” and which described the conduct of prior “without prejudice” (WP) negotiations (including a mediation and subsequent discussions) was admissible in an application for costs against the claimant’s lawyers: Willers v Joyce & Ors  EWHC 937 (Ch).
The court accepted that the WP rule attached to the negotiations during and following the mediation. However, the subsequent “without prejudice save as to costs” correspondence amounted to an agreement to vary the WP status of the earlier negotiations, so that both parties would be able to deploy evidence of the WP negotiations in future arguments about costs.
The decision serves as a reminder to parties and practitioners to exercise care when referring to the substance of mediation discussions (or any other WP communications) in any subsequent correspondence that is not expressed to be WP. Depending on the terms of that correspondence, a court may conclude that the correspondence amounts to an agreement to exclude or vary the application of the WP rule, and therefore the circumstances in which the WP communications may be admissible.
Matthew Eglezos, a Senior Associate (Australia) in our disputes team, outlines the decision below. Continue reading