Without prejudice privilege rejected for survey reports commissioned unilaterally to assist with prospective negotiations

The High Court has held that survey reports commissioned by a party to a dispute for use in potential future without prejudice (WP) negotiations were not covered by the WP rule, because they were commissioned unilaterally outside of the negotiation process: BNP Paribas Depositary Services Ltd v Briggs & Forrester Engineering Services Ltd [2024] EWHC 2575 (TCC).

The WP rule prevents evidence of the content of settlement negotiations from being admitted in evidence in legal proceedings. The question considered by this decision was the extent to which the rule can protect communications with third parties, as opposed to the parties to the negotiations.

The publication of the decision (which was handed down confidentially last October, but only made public on 26 March) follows another recent decision on the application of the WP rule to documents produced by third parties, Mornington 2000 (t/a Sterilab Services) v SoS for Health and Social Care [2025] EWHC 540 (TCC), discussed in our post here.

In the present case, the deputy judge interpreted the previous authorities as demonstrating that the WP rule will apply to reports or other communications with third parties where those documents effectively form part of the negotiations between the parties. That will be the case where the third party report was commissioned, even if by only one of the parties, pursuant to an agreement or understanding between them and as an element of their joint efforts to settle their dispute.

In the deputy judge's view, such a result was based on the public policy underlying the WP rule and did not depend on the court finding that the parties also specifically agreed, whether expressly or impliedly, that the third party communications would be covered by the rule. This is in direct contrast with Mornington, where the judge found that parties can agree to extend the protection of the WP rule to cover, for example, a third party report obtained for the purposes of the negotiations, but unless there was such an agreement the rule would only protect what was said during the negotiations themselves.

These cases demonstrate the current uncertainty on the law in this area, and highlight the risks in commissioning reports from third parties in order to assist with WP negotiations, unless there is a clear agreement to extend the WP protection or the report will be covered by litigation privilege.

As in Mornington, the present decision does not consider whether the third party reports might have been protected by litigation privilege, on the basis that they were obtained for the dominant purpose of obtaining information or evidence for the conduct (including the settlement) of legal proceedings that were in reasonable contemplation. It is not clear whether this point was argued.

Background

The underlying dispute concerned a contract for renovation and building works entered into between the claimants (the Trustees) and the defendant (Briggs). The parties disagreed as to the responsibility for identifying and removing asbestos-containing materials under the contract.

In November 2022, before proceedings were issued, the parties corresponded on a WP basis with a view to resolving their dispute. The negotiations broke down, but in early 2023 the Trustees obtained survey reports on the presence of asbestos in the relevant building, without informing Briggs, in the hope that the reports would be of assistance to any further negotiations between the parties, thus promoting settlement.

The survey reports were not provided to Briggs until 1 July 2024, by which time proceedings had been issued and the Trustees had been ordered to disclose various categories of documents, including documents relating to any asbestos surveys carried out by the Trustees.

Shortly after disclosure was exchanged, but not as part of that process, the Trustees provided Briggs with access to the surveys, via a link to a password-protected electronic folder. The covering letter stated that the documents were privileged and were being provided on a strictly WP basis and without waiving privilege. The letter also stated that opening the folder would constitute acceptance of certain conditions, including that Briggs would not seek to rely on the documents at trial.

Briggs refused to agree to the conditions, and stated that it would access the documents and form its own view as to whether they were privileged. Having done so, Briggs said that it would be treating the documents as open and relying on them at trial.

The Trustees applied to prevent Briggs relying on the survey reports, either because they were protected by the WP rule or because Briggs was bound by the condition imposed in the covering letter providing the documents.

Decision

The High Court (Alan Bates sitting as a deputy judge) dismissed the application and held that the Trustees were required to disclose the survey reports.

Test for WP in third party report

As the deputy judge noted, the key legal issue on the application was in what circumstances, if any, WP can attach to documents that are not themselves communications between the parties to a dispute, but are aimed at resolving the dispute.

The deputy judge referred to Rabin v Mendoza & Co [1954] 1 WLR 271, where the Court of Appeal found that a surveyor's report obtained as a consequence of something provisionally agreed in WP negotiations, and in order to facilitate them, was covered by WP privilege.

On this basis he concluded that, while the focus of the WP rule is on inter-party communications, other documents may fall within the rule. One example is the situation illustrated by Rabin, where a third party is commissioned to prepare a report pursuant to a mutual agreement or understanding, as an element of the parties' joint efforts to settle their dispute. In those circumstances the communications with the third party, and the third party's report, will effectively form part of the negotiations between the parties, such that they are protected by the WP rule.

The deputy judge said it would be incorrect to read Rabin as justifying the application of the WP rule to such communications solely on the basis that the court is giving effect to an agreement between the parties (whether express or implied) that the parties will not seek to rely on the communications at trial. Instead, in the deputy judge's view, the application of the WP rule in such circumstances is based on the public policy underlying the rule.

The deputy judge said another example of where communications that are not between the parties to a dispute could be covered by WP might be where the communications are so closely related to a prospective or ongoing interparty negotiation that permitting a party to adduce them would substantially undermine the utility of the rule. He did not suggest that these examples were exhaustive, but said the claimants had not been able to identify any case law in which WP was recognised for third party communications in other circumstances.

Whether survey reports in this case covered by WP

The deputy judge found that the evidence did not show that the survey reports in this case were commissioned pursuant to a mutual agreement or understanding between the parties: rather they were commissioned unilaterally and without informing Briggs, albeit with good reason and in order to assist with further settlement negotiations. Therefore, based on the deputy judge's interpretation of Rabin outlined above, the reports were not covered by WP.

The deputy judge also considered whether the reports evidenced the content of the parties' WP negotiations in 2022, but found that was not the case as a matter of fact. The mere fact that the Trustees had commissioned the surveys did not itself reveal whether they had offered to do so in the course of the WP negotiations.

Whether Briggs bound by condition in covering letter

Notwithstanding the above conclusions, it was relevant to assess whether Briggs was bound by some kind of contract or estoppel preventing it from relying on the reports at trial even if they were not covered by WP. This argument was rejected on the basis that Briggs did not agree to access the documents on the terms stipulated by the Trustees and, in any event, the documents should have already been disclosed in the proceedings because they were relevant and not privileged.

Therefore, the Trustees were obliged to give disclosure and inspection of the reports in the proceedings, and they could be relied upon at trial (save to the extent that they made any reference to the contents of the parties' WP negotiations in 2022, which should be redacted).