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Without prejudice protection extends to separate litigation

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Alexander Harding

Senior Associate

London

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29 March 2022

An expert report prepared during the course of settlement discussions in Californian proceedings was protected and not disclosable in separate but related English proceedings. If a document is subject to without prejudice protection because it formed part of without prejudice settlement discussions between two parties, then, generally, a third party in subsequent litigation is not able to later demand disclosure of that document and rely on it: Sheeran & ors v Chokri & ors [2022] EWHC 187 (Ch), 26 January 2022.

Without prejudice protection

The without prejudice rule protects communications between parties to a dispute that are made in a genuine attempt to settle the dispute from being admitted in evidence or made the subject of a disclosure order.

The rationale for the without prejudice rule is that parties should be able to communicate frankly during settlement discussions, and even make admissions if necessary, in an attempt to settle disputes where possible.

Third party seeks disclosure in separate proceedings

In the context of a copyright infringement claim concerning the Ed Sheeran song “Shape of You”, the defendants sought orders for disclosure of a musicology report which had originally been produced during settlement discussions in separate Californian proceedings between Sheeran and another artist. The defendants became aware of the existence of the report after it was referred to in emails, which were disclosed by the claimants.

The defendants claimed that because the Californian proceedings had settled, and as part of that settlement Sheeran had given up a 35% share of the musical rights in another song (“Photograph”) to another artist, this gave rise to an inference that Sheeran was engaged in the “habitual copying” of songs. Although Sheeran settled the Californian proceedings, in doing so he maintained that no infringement had occurred.

The claimants denied that the disclosure of the musicology report from the Californian proceedings was reasonable and proportionate under Practice Direction 51U and argued that the report was in any event subject to without prejudice protection and so should not be disclosed.

Without prejudice protection maintained against a third party

The High Court agreed with the claimant. It was not reasonable and proportionate for the musicology report to be disclosed under Practice Direction 51U.

The judge also agreed that the report attracted without prejudice protection and gave a useful restatement of the scope of how without prejudice protection applies against third parties. If a document is subject to without prejudice protection because it formed part of without prejudice settlement discussions between two parties, then, generally, a third party in subsequent litigation is not able to later demand disclosure of that document and rely on it. 

There are two main reasons for this:

  • the without prejudice protection status of a document survives even if the original case in which the protection arose has successfully settled; and
  • the without prejudice protection extends beyond the parties to the negotiations which gave rise to it, and therefore precludes third parties from using the material.

Comment

The judgment makes it clear that that it would be contrary to public policy, and liable to discourage settlement of litigation, if documents of this nature, expressly shared on a without prejudice basis, were disclosable in subsequent proceedings raising similar issues.

If the without prejudice protection did not continue after a successful settlement parties may be disinclined to share those documents in the first instance in order to try and settle disputes, as there would be a risk that the same material would be relied upon or disclosed in subsequent proceedings, even if those proceedings involved different parties.

This judgment serves as a helpful reminder that without prejudice protection will continue to prevent use of documents even in circumstances when disclosure is being sought by a third party in a subsequent litigation.

Further information

This case summary is part of the Allen & Overy Litigation and Dispute Resolution Review, a monthly publication.  If you wish to receive this publication, please contact Amy Edwards, amy.edwards@allenovery.com.

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