Privilege and unambiguous impropriety

Savings and Investment Bank Ltd (in liquidation) v Fincken (2) CA TLR 25 November

The claimant sought permission to amend its particulars of claim based on an admission said to have been made by the defendant at a without-prejudice meeting. The judge had permitted the amendment on the basis that the admission fell within a recognised exception to the doctrine of without-prejudice privilege, known as ‘unambiguous impropriety’, and therefore had lost the protection of the rule. In allowing the defendant’s appeal against the order, the Court, while allowing the existence of an exceptional rule to cover cases of unambiguous impropriety, stressed the importance of the public interest which had created the general rule of privilege and cautioned against the too ready application of the exception. Even though the defendant had submitted no evidence on the issue, the Court would be reluctant to find that an absence of challenge was a critical factor taking the case outside the philosophy of the jurisprudence expressed in the leading authorities. That philosophy was antagonistic to treating an admission in without-prejudice negotiations as tantamount to an impropriety unless the privilege was itself abused. It was not abuse of the privilege to tell the truth, even where the truth was contrary to one’s case. That, after all, was what the without-prejudice rule was all about – to encourage parties to speak frankly to one another in aid of reaching a settlement. The public interest in the rule was very great and not to be sacrificed save in truly exceptional and needy circumstances. The public interest in favour of the protection of without-prejudice privilege discussions held sway over the public interest in the discouragement of perjury, unless the privilege was in itself abused on the occasion of its exercise. It was commensurate with each of the concepts set out in CPR rule 1.2, as making up the overriding objective that cases should be dealt with justly, that the application for amendment should fail and the appeal be allowed.