In two recent cases the court was asked to consider the scope of without prejudice privilege (WPP) – can WPP attach to documents connected with settlement negotiations but generated by non-parties to the dispute? In each case, the judge found that WPP could in principle attach to such documents but held that it did not do so on the facts. However, while these two cases produced similar outcomes, the two judges adopted different reasoning.
In Mornington 2000 LLP v Secretary of State for Health and Social Care [2025] EWHC 540 (TCC), the defendant secretary of state agreed to purchase Covid-19 lateral flow tests from the claimant but subsequently refused to accept delivery of the tests because the site in China, where the tests had been manufactured by a sub-contractor, failed an audit of its working conditions. In ensuing without prejudice discussions, the parties explored commissioning a further audit as part of a possible route to settlement. The defendant subsequently commissioned and funded such an audit. The defendant asserted that the resulting report (the audit report) was covered by WPP on the basis that it had been created under the umbrella of without prejudice negotiations.
In BNP Paribas Depositary Services Ltd v Briggs & Forrester Engineering Services Ltd [2024] EWHC 2575 (TCC), the parties had entered into a contract for the defendant to do renovation and construction works at a skyscraper owned by the claimants. A dispute arose about who would be responsible for identifying and removing asbestos-containing materials at the property. The claimants commissioned a third-party surveyor to produce specialist ‘refurbishment and development’ reports identifying the presence and types of asbestos-containing materials in the areas where works were to be carried out (the R&D reports). The claimants argued that the R&D reports were covered by WPP because they were commissioned pursuant to, and/or in furtherance of, without prejudice settlement negotiations between the parties.
In Mornington, Mrs Justice Smith DBE drew a distinction between the two justifications normally given for the WPP rule: public policy and the agreement of the parties. She said that the starting point, based on the public policy of allowing parties to speak freely in settlement negotiations, is that WPP operates to exclude all negotiations genuinely aimed at the settlement of a dispute. She went on to say, however, that parties are free to agree to narrow or broaden the scope of the rule as they see fit.
The judge then took a two-stage approach. First, she considered whether the audit report fell within the public policy justification for the rule. She held that it did not, saying that it was difficult to see how a third-party report, which contained neither negotiations nor admissions, nor indeed even any statements by a party to a dispute, could fulfil the public policy objective of enabling parties to speak freely.
Then the judge considered whether the parties had expressly or impliedly agreed that the audit report would be covered by WPP. On the facts, she found that there was no such agreement. The defendant’s subjective intentions in commissioning the report were irrelevant and there was nothing in the interparty correspondence that evidenced an intention on the part of both parties that the audit report would be covered by WPP.
As the audit report fell within neither justification for the WPP rule, the judge ordered it to be disclosed.
In BNP Paribas, Mr Alan Bates (sitting as a deputy High Court judge) placed greater emphasis on the public policy justification for the WPP rule. He said that the policy of ensuring that parties to a dispute can negotiate freely and candidly with one another meant that the ‘focus’ of the WPP rule would usually be on interparty negotiations. However, he also thought that ‘there may, in some circumstances, be documents falling outside of that specific focus, but within a narrow penumbra around it, that the rule will also render inadmissible’.
One such situation, where third-party communications would fall within this ‘narrow penumbra’ of interparty negotiations, would, according to the judge, be where the parties had agreed that the relevant third party would play a role in the mechanism of their dispute resolution process. In that situation, communications with the third party would be covered by WPP.
However, that was not what had happened on the facts of this case. Although the claimants had hoped that the reports would assist with negotiations and promote settlement, this was not enough to bring the reports within the scope of the WPP rule. Critically, there was no agreement between the parties that the claimants would commission the reports as part of the process by which the parties would seek to resolve their dispute. Rather, the decision to commission the reports had been a unilateral one taken by the claimants.
These cases suggest that it is possible to bring communications with third parties under the umbrella of WPP. While the analysis differed, the conclusion in both cases ultimately turned on what the parties had (or, more accurately, had not) agreed between themselves. The practice point for parties is that, if they wish communications with third parties to be protected by WPP, they should take care to reach a clear and specific agreement with the other side about the role the third party will play in their negotiations and what will and will not be covered by WPP.
Although space constraints do not permit detailed consideration here, both judgments (if followed) raise issues that may require further guidance from the courts. Mrs Justice Smith’s view, in Mornington, that the parties are free to widen (or narrow) the scope of the WPP rule raises the question of how far the parties can go, for example, if there is no attempt to settle a dispute or even no dispute at all. Equally, the concept in BNP Paribas of communications falling within the ‘penumbra’ of interparty communications is likely to be the subject of further debate in future cases.
Lois Horne is head of disputes at Macfarlanes and an LSLA committee member
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