| EVIDENCE — Privilege — “Without prejudice” discussions — Witness statement of claimant employee referring to negotiations over disputed employment terms — Whether negotiations admissible in action for wrongful dismissal and breach of contract
Framlington Group Ltd and another v Barnetson [2007] EWCA Civ 502
CA: Auld, Longmore and Toulson LJJ: 24 May 2007
An employee’s discussions with his employer about the scope of his entitlement on the employment contract were inadmissible as “without prejudice” communications even though at the time they occurred there was no litigation in prospect and no basis for litigation at the time they took place.
The Court of Appeal so held allowing an appeal by the defendants, Framlington Group Ltd and Axa Framlington Group Ltd, from a decision of Judge Seymour, sitting as a High Court judge on 19 January 2007, by which he refused to order the claimant, Ian Barnetson, to amend and re-serve his witness statement in his action against the defendants for wrongful dismissal and breach of contract so as to exclude references to discussions about his terms of employment.
AULD LJ said the claimant had been appointed chief operating officer by the defendants in March 2005 at an annual salary of £172,500, with car allowance, pension, holiday and health-care benefits. He had understood in discussion with the defendants’ chairman, Lord Douro, that he would also be entitled to restricted shares in Framlington and would be admitted to its bonus scheme. Between March and October he had repeatedly pressed the chairman without success to provide those extra benefits. The defendants’ eventual response was to dismiss him in November 2005. In support of his pleaded claim for the shares and bonus he had referred in the witness statement to discussions in which the defendants had offered £200,000 by way of bonus, which he had accepted conditional on the defendants accepting his share claim. The judge decided that the negotiations over shares and bonus were to prevent a dispute occurring, rather than to compromise an existing dispute, and refused to order that those discussions be cut from the statement. The main issue on appeal was whether the negotiations constituted a dispute and whether they were sufficiently proximate to the litigation to engage the rule. The rule would founded on the public policy of encouraging litigants to settle their differences rather than litigate them to a finish. It followed that to give full effect to the underlying public policy a dispute could engage the rule nothwithstanding that litigation had not yet begun. If the privilege were confined to settlement communications once litigation had been threatened or shortly before it was begun, both sides would have an incentive to make threats of litigation before they could safely start talking sensibly. However the ambit of the rule should not be extended any further than was necessary to promote the public policy interest. The claim to privilege could not turn on proximity in time to the litigation, but rather on the subject matter of the dispute. Confining the operation of the rule, as the judge did, to negotiations after the threat of litigation, or by reference to some limit set close before litigation, did not fully serve the public policy interest.
LONGMORE and TOULSON LJJ agreed.
|
