Without Prejudice Privilege – “It Takes Two to Tango”?

SNAPSHOT

Secretary for Justice v Wong [2021] HKCFI 162, confirms that for a communication to be protected by without prejudice privilege it must have been made in the context of a “relevant dispute” between the parties and in a genuine attempt to settle one or more issues in that dispute. The case is another example of the courts’ willingness (where appropriate) to review claims without prejudice privilege to ensure that they are kept within permissible boundaries (see – “A Practice Insight Into Without Prejudice”, Industry Insights, February 2020).

SOME LEGAL PRINCIPLES

In this case, by his solicitors’ letter (marked “without prejudice”) the first defendant attempted to negotiate with respect to his alleged occupation of part of a plot of land owned by the government which runs alongside land that he co-owns. It appears that the first defendant’s negotiation was not in the context of a dispute between the parties because the government’s ownership of the adjoining land was not in dispute. Although there appears to have been a dispute (at some stage) among the co-owners of the land, that was not a “relevant dispute” as between the District Land Office and the first defendant – as such, his solicitors’ letter was not in substance without prejudice and, therefore, it could be referred to by the plaintiff in the Statement of Claim.

The mere fact of an attempt at negotiation by one party with another party does not (of itself) give rise to a communication that is protected without prejudice privilege. There must be in existence a “relevant dispute”.

In determining whether a communication is created for a without prejudice purpose, the court adopts an objective approach and looks at how a “reasonable person” would consider the communication in the context of the relevant factual matrix.

TAKEAWAY POINTS

When entering into without prejudice communications, parties and their representatives should ensure that they make their intentions expressly clear and that they do so in the context of a “relevant dispute”, whether (for example) in respect of actual or contemplated legal proceedings. A mere attempt at negotiation does not (of itself) attract without prejudice privilege.

While each claim to privilege rests on its facts, legal representatives and clients (who often handle negotiations themselves) would do well to remember these basic principles and consider the labels which they attach to their correspondence. Simply putting a “Without Prejudice” label on a letter does not attract the protection afforded to without prejudice communications (although, it is a start). A “Without Prejudice” label also does not alter the status of a prior communication made on another basis – while it is possible for a without prejudice communication to form part of a series of communications written on the same basis.

Jurisdictions

Partner, RPC

Senior Consultant and Accredited Mediator, RPC

A commercial disputes lawyer with over 35 years' experience, David has extensive experience in handling the defence of professional indemnity, financial lines and other special risks claims as well as advising insurers in relation to such claims.

David has worked on the defence of claims in various jurisdictions including England, Hong Kong, Singapore, Malaysia, the PRC, Taiwan, Bermuda and the BVI.  He also has significant experience in handling regulatory and disciplinary matters.

He has considerable experience providing general risk management advice to professionals such as accountants, solicitors, insurance brokers, surveyors and stock-brokers. 

Most recently, he has been developing a practice as a commercial mediator. David is accredited as a mediator by both the Centre for Effective Dispute Resolution (CEDR) and the Hong Kong Mediation Accreditation Association Limited (HKMAAL).