Kerry Underwood

WITHOUT PREJUDICE SAVE AS TO COSTS CORRESPONDENCE ADMISSIBLE IN APPLICATION FOR NON-PARTY COSTS

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Willers v Joyce & Ors [2019] EWHC 937 (Ch)

the High Court held that correspondence marked “without prejudice save as to costs” was admissible in a subsequent application for non-party costs under section 51 of the Senior Courts Act 1981.

The lawyers represented the claimant in a failed action against the applicants for malicious prosecution and the claimant was ordered to pay the applicants’ costs but the claimant had no money.

The applicants claimed their costs from the lawyers on the basis that those lawyers had a substantial financial interest in the outcome of the claim, as the damages claimed represented costs owed by the claimant to the lawyers in the related proceedings.

The applicants argued that correspondence marked without prejudice save as to costs between the respective firms of solicitors concerning a failed mediation, was admissible as evidence of the respondent lawyers’ attitude to the litigation.

The High Court held that the evidence was admissible solely on the basis that the parties had agreed that the correspondence could be used in the context of an argument about costs.

The High Court did not accept that, by marking the correspondence without prejudice save as to costs, the respondent lawyers were confining the relaxation of the without prejudice rule to the hearing of an application for costs against the claimant.

The High Court did however reject the argument that the correspondence fell within the “independent fact” exception to the without prejudice rule identified in

Muller v Linsley & Mortimer [1996] P.N.L.R. 74.

The High Court did not see how the extent of the influence the respondent lawyers had over the claim, could properly be separated from the content of the settlement negotiations themselves.

Admitting evidence for this purpose would undermine the policy underlying the without prejudice rule and lawyers would not be able to speak freely about settlement if they thought that that information could later be used in costs proceedings against them.

Relying on the recent case of

Briggs v Clay [2019] EWHC 102 (Ch) (25 February 2019),

the High Court held that there was no reason why the without prejudice protection afforded to the claimant could not be relied upon by his legal representatives in a subsequent action for costs in the same action, made against them personally, under the section 51 procedure.

However, in this case, that protection had been waived.

The judgment contains a detailed analysis of the without prejudice rule and, as set out above, refers to the recent decision in Briggs v Clay where the rule was also looked at in detail.

The effect of this decision is that “without prejudice save as to costs” excludes from protection section 51 applications as well as ordinary between the parties’ costs issues.

If a party did not wish to waive the without prejudice rule for section 51 purposes it would need to use wording such as:

“Without prejudice save as to costs between the parties, but still without prejudice in relation to applications under section 51 of the Senior Courts Act 1981.”

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Written by kerryunderwood

April 25, 2019 at 7:00 am

Posted in Uncategorized

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