The Privilege Concept

Have you ever received a document marked Privileged, Without Prejudice or even Without Prejudice Save as to Costs' I bet you have, but do you know what these words actually mean' Let me try and explain.
 
 

Have you ever received a document marked “Privileged”, “Without Prejudice” or even “Without Prejudice Save as to Costs”? I bet you have, but do you know what these words actually mean? Let me try and explain.

 
The Civil Procedure Rules define the concept of privilege as “The right of a party to refuse to disclose a document or produce a document or to refuse to answer questions on the grounds of some special interest recognized by law”.  Privileged documents are simply documents in the possession of or produced by a party which fall into this classification.
 
Whether or not a document is privileged will depend on why it was created.  For example, legal advice given by a solicitor to his or her client will automatically be privileged in law.  The advice taken is private and is given for the sole benefit of the client.  No other party has the right to see this advice.
 
The Courts have long since recognised that disputes are an expensive business and that from time to time a party may wish to try and extract itself from a legal case on terms which have nothing to do with a party’s legal rights and everything to do with commercial common sense.
 
So, given this background, how do you make offers to settle disputes without compromising your legal position should your efforts fail?  The answer is to mark such offers as being “Without Prejudice”.  The courts will treat such communications as being privileged and they will be excluded from the evidence used to decide the case.
 
The “Without Prejudice“ concept is founded on the public policy of encouraging litigating parties to settle their differences as soon as possible rather than compelling parties to litigate to the end.
 
But please be careful.  Marking a document as being “Without Prejudice” does not automatically make the document become privileged.  Unless the document concerned is privileged by its very nature, eg legal advice from a solicitor or contains a proposal to settle the underlying dispute with your opposing party, it will not be treated as being privileged and will be considered as part of the evidence in deciding the case.
 
Given this background you will see why it is important to be careful about what is put down in writing in any document.  The general rule in law is that all documents in your possession, other than privileged documents, must be disclosed to the other party to your dispute.  This means everything including, for example, copies of board minutes, internal reports, hand-written comments on letters, entries in diaries and all manner of things which you hoped would never see the light of day! 
 
Although ordinarily privileged documents cannot be disclosed to a Court or tribunal they can in certain circumstances be considered.  For example, an exchange of privileged documents can be disclosed to evidence that an agreement has already been reached or for a Court or tribunal to consider an allocation of costs between the parties.
 
It is this second example which explains why you may sometimes see a document marked “Without Prejudice Save as to Costs”.  This type of document is an offer to settle on the terms contained within the document but importantly makes clear that the terms of the offer are to be considered by the Court or Tribunal at a later date if or when the Court or tribunal is obliged to consider the conduct of the parties and the allocation of costs between them.

Peter Vinden is a practising adjudicator, mediator, expert and conciliator.  He is Joint Managing Director and Chairman of Vinden and he can be contacted by email at pvinden@vinden.co.uk
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