What is the ‘Without Prejudice’ rule?

‘Without prejudice’ is a statement typically used on top of documents or at the start of conversations which help to settle disputes without involving lawyers. It means that the contents of the documents/letters/conversations cannot be used legally as evidence in a case, as ‘without prejudice’ indicates that both parties agree to settle the dispute away from the law.

The benefit of using the ‘without prejudice’ rule is that the two parties can reach a mutually beneficial solution to the problem without going through court. It also enables open negotiation; a party can use it to put forward an offer to resolve a dispute without having to worry that the other party might use that offer to prove an admission of legal responsibility.

However, this restriction does have its own exceptions- if the content of the communication involves blackmail or improper behaviour it will lose the protection of the ‘without prejudice’ rule and can be used as evidence in legal proceedings. There is also the exception that communication can only be ‘without prejudice’ if it’s a genuine attempt to settle a dispute. The criteria for a ‘dispute’ were a key issue discussed within the BNP Paribas v Mezzotero case.

Case Study: BNP Paribas v Mezzotero [2004] IRLR 509

Ms Mezzotero was an employee at BNP Paribas, where she had worked for 6 years. After returning from maternity leave, Ms Mezzotero raised a grievance with her employers complaining of direct discrimination, victimization and being prevented from returning to her old job.

She claimed that after being demoted from her job, ‘treated unfavourably’, locked out of her computer and encouraged to leave, she was called into an unexpected meeting with Mr Hearn and Mr Doyle (her superiors). They asked her whether they could speak ‘without prejudice’, to which Ms Mezzotero agreed. Technically this would mean that the contents of their conversations would be protected by the ‘without prejudice’ rule, and so could not be discussed in court or used as evidence in any legal proceedings. The outcome of the conversation was that Mr Hearn, in exchange for Ms Mezzotero terminating her job (although it was made clear that neither party saw this as Ms Mezzotero’s dismissal) offered a total of £100k (in line with BNP Paribas’s standard redundancy package). Ms Mezzotero accepted, meaning she gave up her pass card, collected her personal items from her desk and left the Bank. When her grievance was brought up at the Employment Tribunal later, the question arose as to whether the discussion in her meeting under ‘without prejudice’ could legally be used as evidence.

Primarily, the ‘without prejudice’ statement should only be used in circumstances where the two opposing sides are in dispute. In this case, however, it was questioned whether having a ‘grievance’ counted as ‘being in dispute’ with one another.

The case ended up before the Employment Appeal Tribunal (EAT), who determined that the meeting could not be protected by the ‘without prejudice’ rule because the two sides were not in fact ‘in dispute’. Therefore, the contents of the meeting could be used as evidence in legal proceedings.

Furthermore, there was additional controversy when it came to whether the ‘without prejudice’ statement was valid because it was instigated and effectively forced on Ms Mezzotero by a person of higher authority.

The EAT ruled that because Ms Mezzotero’s meeting was with her superiors at the bank, and the ‘without prejudice’ statement was only introduced suddenly when the meeting was underway, it wasn’t clear whether or not Ms Mezzotero agreed to it. As she was subordinate to Mr Hearn and Mr Doyle, with whom she had the meeting, it was found that she could have been coerced into accepting terms she didn’t actually agree with, but would then be unable to raise this later in legal proceedings if the ‘without prejudice’ statement was allowed to stand. Consequently, this situation provided further grounds for the EAT to regard the ‘without prejudice’ label as invalid.

In summary, the ‘without prejudice’ rule can only be used in situations where parties are genuinely attempting to settle a dispute  and where there is no suggestion that either party has been pressured or coerced into accepting that a discussion be ‘without prejudice’.. Furthermore, BNP Paribas v Mezzotero shows that having a ‘grievance’ with an employer does not necessarily count as a ‘dispute’.

The key points to be taken away from this case, concerning the ‘without prejudice’ rule, are that both employee and employer need to be aware of their legal rights when negotiating a grievance or employment dispute. Employees need to understand that the ‘without prejudice’ rule can be used to prevent sensitive discussions from being heard in legal proceedings. This means being wary of any attempts by their employer to pressure them into dealing with matters through ‘without prejudice’ conversations, and seeking legal advice whenever unsure of their rights.