The Advocate
Informing Marine Engineers about legal matters
Authored by: Darren Williams, Williams & Company
Brought to you by www.dieselduck.net, comments to [email protected]
"Without Prejudice" Communications: Beware this safe harbour, it is shallow
It is a common misconception that marking a letter, email, or
other correspondence with the expression "without prejudice", makes
the person using that expression immune from the content of what is
written. Examples might include: "without prejudice, I admit I
collided with your vessel and then left the scene, but it only
happened because your anchor light was not visible", or "I agree
that I owe you the money, but without prejudice, you will never get
a dime from me", or "I admit I had been drinking all day but I was
only at the helm for a few minutes while the skipper was down below
in the head [the top of the page being marked 'without prejudice']".
In each of these cases the phrase "without prejudice" does nothing
to protect the person from the admission that they were in fact
involved in the collision, they actually did owe money, or they had
indeed been under the influence while operating the vessel -
admissions that in many cases are at times unnecessary or unwise to
make, whether they are true or not.
The objective of this month's "Advocate" is to educate mariners
about when using the expression "without prejudice" will protect
them, or provide safe harbour for what is being said, and when it
will not.
THE POLICY BEHIND THE EXPRESSION: SETTLEMENT PRIVILEGE
Generally, what people expect the expression "without prejudice"
will do is protect them from the fact the statement was made. This
protection is commonly known as a type of "privilege". When a
statement is privileged it means, among other things, it is not
admissible as evidence in court. If it is not admissible as evidence
the statement cannot, ultimately, be used against the person who
made it. Therefore, the real objective in using the expression
"without prejudice" is to keep the statement privileged. The public
policy behind maintaining privilege over settlement discussions is
to encourage full disclosure and frank discussion in aid of
settlement so that litigation can be avoided. However, as discussed
below, the availability and extent of the privilege is limited by
the nature of
what is said.
THE COMMON MISCONCEPTION: BLANKET PROTECTION
The expression "without prejudice" is often used before the
person has sought the advice of a lawyer about what to say, and what
not to say, when engaged in a dispute with another person. Its use
is surprisingly common in communications between parties in the
marine industries, and the rough examples above are only a very
small portion of cases where I have seen the expression used to the
detriment of the person relying on it.
The law varies from province to province, state to state, and
country to country. A prominent American internet site on law
defines the expression "without prejudice" as follows:
Without prejudice: A statement set onto a written document which qualifies the signatory as exempted from it's content to the extent that they may be interpreted as containing admissions or other interpretations which could later be used against the person signing; or as otherwise affecting any legal rights of the person signing.
While this broad or blanket protection may or may not be the correct definition in the United States, it is entirely incorrect in British Columbia and most of Canada.
THE CORRECT VIEW: TWO REQUIREMENTS FOR PRIVILEGE
Generally, the expression "without prejudice" will not qualify
the signatory of the statement as exempted from the contents being
interpreted as the author "admitting" what is said. In other words,
the written statement can be used against the author in court as
evidence that the facts in the statement are true and he has
admitted them as such.
A common Canadian law site says this: the term "without prejudice"
is also used in the course of negotiations to indicate that a
particular conversation or letter is not to be tendered as evidence
in court. Such correspondences must be made in the course of
negotiations and must be a genuine attempt to settle a dispute
between It may not be used as a facade to conceal facts or evidence
from the court and as such a document marked "without prejudice"
that does not actually contain any offer of settlement can be
submitted should the matter proceed to court. Courts may also decide
to exclude from evidence communications not marked "without
prejudice" which do contain offers of settlement.
This is a correct version of the law on "without prejudice"
statements in British Columbia and most of Canada. It highlights two
important ingredients that are required in the statement in order
for "without prejudice" to protect the author from what is said:
there must an active negotiation arising from an attempt to reach an
agreement on some issue; and the statements must be a genuine
attempt to settle the issue.
This view of the law has been confirmed by the B.C. Court of Appeal
in the 1984 case of Belanger v. Gilbert, when it agreed with the
following rule in the 1918 case of Schetky v. Cochrone: In our
opinion the rule which excludes documents marked 'without prejudice'
has no application unless some person is in dispute or negotiation
with another, and terms are offered for the settlement of the
dispute or negotiation ... This lays it down that before the
privilege arises two conditions must exist, viz.: (a) a dispute or
negotiation between two or more parties; and (b) in which terms are
offered ...
Examples of effective use of "without prejudice" might be: "without
prejudice, I offer you $5,000 for the damage to your boat in
exchange for you agreeing not to sue me", or "I agree that I owe you
money, however, I am broke and can only give you $500 to forgive the
debt". Each of these statements contain a genuine settlement offer
in the context of a dispute and are therefore privileged, or not
admissible against the person making the statement.
THE SHALLOW HARBOUR OFFERS LIMITED PROTECTION
Even if the two requirements of a statement marked "without
prejudice" are met, caution should be had as to what portions of the
communication are protected as privileged. Simply because part of a
letter is privileged does not make all of the letter privileged. A
letter marked "without prejudice" can be segmented into admissible
an inadmissible portions and parts that do not relate to a genuine
offer to settle the dispute can be used against you.
Another important point to consider is that simply because a
communication is privileged as between two parties (the two persons
that are party to the dispute) does not mean that the "without
prejudice" communication cannot be used against the person making
the statement if the statement falls into the hands of a third
party. For example, a without prejudice settlement letter between a
mariner and his insurance company may be inadmissible in a further
dispute between the mariner and the insurance company, but would be
admissible in a dispute between the mariner and his spouse in a
divorce (for example, the mariner receives a $500,000 insurance
settlement that the ex-spouse then seeks a portion of).
SUMMARY POINTS TO REMEMBER:
The general rules are these:
relate to the settlement of a dispute between two or more parties will not be
privileged, and therefore can be used against the person who made it;
parties is privileged, and therefore cannot be used against that person, whether it is marked "without prejudice" or not.
Darren Williams is a Barrister and Solicitor (Lawyer) specializing in Admiralty Law, which has jurisdiction over maritime matters. Darren has worked extensively on the water as well as in the courtroom. He is a Barrister & Solicitor based out of Victoria, British Columbia, Canada, practicing at the Law Firm of "Williams & Company".
On this webpage, he brings us timely and relevant articles on the legal aspects of being a Marine Engineer in today's world. Although the articles have a predominately Canadian flavour, we are sure you will find his legal point of view enlightening where ever you ship sails. Darren has also published other legal articles on general admiralty law, view them all at the Williams & Company website. You can reach Darren for question or comment by phone at 250-478-9928 or by email.