The implications of using these two different negotiation tactics were deemed “both real and important” in Marcura Equities FZE & Anor v Nisomar Ventures & Anor [2018] EWHC 523 (QB).
Communications “Without Prejudice” allow disputing parties to negotiate freely and protect themselves from repercussions of future prejudice but most importantly they are not admissible in court. However, “Without Prejudice Save as to Costs” communications may be shown to the court following judgment of the substantive matter to reveal how reasonably a party has acted and can in turn influence an award on costs.
The case of Marcura involved an alleged unlawful disclosure and use of confidential information for which the Claimants sought and agreed injunctive relief and damages of £35,000.
During negotiations the parties met to discuss settlement. The status of this meeting, that is whether it was WP or WPSATC transpired as a contentious issue at the point at which costs were considered by Nicholas Vineall QC (sitting as Deputy Judge in the High Court). The context of this meeting is that either or both of the parties might have wanted it to be entirely WP or might have preferred it to be WPSATC. The Defendants submitted that an agreement was made that the meeting was not open but WP but the issue of whether it was SATC was neither included nor excluded in this agreement. The Claimants were content to proceed on the basis that this was an accurate reflection of the discussion that took place prior to the meeting. The judge ultimately decided that the settlement meeting was WP only and so what happened at the meeting had no bearing on the decision on costs. The judge commented that
“the advantage of a purely WP meeting is that it can lead to the frankest possible discussion, without either party being worried that what they say might be used against it on costs”. He further added “If such a meeting is purely WP, either party wanting to make an offer which might affect costs can put such an offer in a subsequent WPSATC letter”.
In making his decision the judge made reference to the Court of Appeal decision in Gresham Pension Trustees v Cammack [2016] EWCA Civ 655 in which it was found that, when dealing with costs, the original judge had been wrong to take in to account an attendance note of a WP exchange during negotiations that took place expressly WPSATC. The decision to make this particular exchange WPSATC could not be made unilaterally.
The Defendants’ in Marcura sought to contend that it could be inferred from the surrounding circumstances that it was really intended by both parties that the meeting be WPSATC and the Claimants’ submitted that the decision in Gresham meant that only an express statement that a WP meeting was merely WPSATC could ever be sufficient to achieve WPSATC status. The judge opined that there was nothing in the surrounding circumstances that inferred or concluded that this particular meeting was intended by both parties to be WPSATC, despite nothing being said to that effect. This meant that the judge in Marcura did not have to decide whether the Court of Appeal in Gresham held that the WPSATC status can only ever be achieved by express statement.
Assuming clarity is what you desire at the costs stage of a case, it is advisable to be crystal clear when partaking in either WP or WPSATC exchanges about whether each individual communication is wholly without prejudice or without prejudice save as to costs.
It is also worth noting that this judgement made the point that monetary claims of relief sought are not necessarily the right focus when determining a costs order in a confidential information case. The judge dismissed the Defendants’ argument that £35,000 in damages was so modest that it should not be used to justify the award of the costs claimed by the Claimant in their approved Budget of almost £450,000 and did not agree that it was disproportionate. It was therefore ordered that
“given the nature and range of relief sought and the range of the relief obtained under the settlement, it is proportionate that the Claimants recover the whole of their costs, subject to detailed assessment”.
Injunctive relief in addition to the monetary relief was pertinent in this instance.