In the recent unfair dismissal case of Hammerton v Knox Grammar School [2013] FWC 9024 the Fair Work Commission ordered the production of “without prejudice” documents. The relevant documents were issued during settlement negotiations between the parties.
Ms Hammerton (the applicant), argued that she was forced into resigning during the said negotiations and was therefore, constructively dismissed.
Deputy President Sam ordered the documents be turned over on the basis that documents would assist the Fair Work Commission in determining whether or not that allegation made by Ms Hammerton was true.
What are “without prejudice” communications?
At law, evidence of admissions by words or conduct made by parties who engage in genuine negotiations to settle a dispute are privileged. This is unless the parties to the negotiations agree otherwise.
The “privilege” which attaches to without prejudice negotiations exists to allow the parties to freely explore settlement options. Accordingly, parties may make admissions, in the knowledge that if negotiations fail, those admissions will not be used against them as evidence before the Courts.
However, parties need to keep in mind that there are established exceptions to the without prejudice rule.
When is “without prejudice” communication admissible?
- If it is evidence of a concluded settlement agreement;
- If it is evidence of statements made by one party and relied upon by another giving rise to an estoppel;
- If it is evidence to set aside a settlement agreement on the grounds of misrepresentation, fraud or undue influence;
- If it is evidence of the fact that one of the parties acted reasonably with respect to attempts at mitigating its losses;
- If the communication is marked “without prejudice save as to costs”, then it may be admitted into evidence after the conclusion of a hearing to determine the issue of costs.
Lessons to take away
Employers and employees should be aware of the above exceptions to the without prejudice rule.
While it is encouraged that parties enter into negotiations to avoid litigation, both parties should always remember that the negotiations may not succeed. In these circumstances, communications intended on a “without prejudice basis” may be admissible against them.
Employers in particular, should avoid putting into writing anything that they would not like to see admitted into evidence before a Court or Tribunal should negotiations ultimately fail. Please feel free to contact me if you have any questions.
The information provided in this article is for general information and educative purposes in summary form on legal topics which is current at the time it is published. The content does not constitute legal advice or recommendations and should not be relied upon as such. Whilst every care has been taken in the preparation of this article, FC Lawyers cannot accept responsibility for any errors, including those caused by negligence, in the material. We make no representations, statements or warranties about the accuracy or completeness of the information and you should not rely on it. You are advised to make your own independent inquiries regarding the accuracy of any information provided on this website. FC Lawyers does not guarantee, and accepts no legal responsibility whatsoever arising from or in connection to the accuracy, reliability, currency, correctness or completeness of any material contained in this article. Links to third party websites or articles does not constitute any endorsement or approval of those sites or the owners of those sites. Nothing in this article should be construed as granting any licence or right for you to use that content. You should consult the third party’s terms and conditions of use in relation to any third-party content. FC Lawyers disclaims all responsibility and all liability (including liability for negligence) for all expenses, losses, damages and costs you might incur as a result of the information being inaccurate or incomplete in any way. Appropriate legal advice should always be obtained in actual situations.
Prefer to get in touch?
With offices in Brisbane, Sunshine Coast, North Queensland and Sydney, our team is well equipped to provide both advice and support across a broad range of legal areas.
