Litigation: Without Prejudice

The spotlight has been put on Without Prejudice (WP) communications in a recent reinsurance case between English & American and Axa. WP communications are normally privileged from disclosure by either party in proceedings. he privilege exists to encourage parties to settle their disputes on the basis that concessions can be made in WP negotiations in the knowledge that they cannot be used by the other party in the proceedings.

The parties were negotiating the settlement of claims under various reinsurances and had met to explore settlement on a WP basis. After this meeting, Axa sent two letters to English & American which were not marked "WP". The judge decided that the letters had been open offers, albeit hedged with conditions and constraints (including a statement in one letter that the settlement offer was made without prejudice to Axa’s right to deny liability). As such, they were not WP and did not attract privilege. English & American was therefore entitled to rely on the