High Court finds parties agreed to vary application of “without prejudice” rule in subsequent “without prejudice save as to costs” correspondence
Matthew Eglezos
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 [2019] 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 outlines the decision below.
Background The respondent solicitors and junior counsel (the Lawyers) represented the claimant in proceedings against the defendant (and subsequently his estate) for malicious prosecution and abuse of process. In the malicious prosecution claim, the claimant alleged that one of the companies through which the defendant conducted his business (Langstone) had maliciously brought a claim against the claimant. The underlying claim had been discontinued and Langstone had been ordered to pay the claimant’s costs, but those costs were reduced on detailed assessment, leaving a substantial shortfall which the claimant was liable to pay to the Lawyers (who had also represented the claimant in the underlying claim) The claimant sought to recover that shortfall, among other damages, from the defendant’s estate in the malicious prosecution claim. As the claimant was clearly unable to pay the shortfall from his limited resources, the Lawyers had a substantial financial interest in the outcome of the malicious prosecution claim. The claimant and the defendant executors (the Executors) engaged in two mediations, which were unsuccessful. The claim went to trial and was dismissed, and the claimant was ordered to pay the Executors’ costs. As the claimant was impecunious, the Executors successfully applied for the Lawyers to be joined as parties to the malicious prosecution proceedings so that the Executors could make a costs application against the Lawyers personally.