THE DANGERS OF ACCIDENTALLY DISCLOSING WITHOUT PREJUDICE OFFERS: THE TRIAL JUDGE WAS “HANDED A BOOBY-TRAPPED BUNDLE”

The judgment of Sir Jonathan Cohen in  Koukash v Koukash [2022] EWHC 1001 (Fam) underlines the importance of keeping without prejudice offers out of the sight of the trial judge.  A finding in a family case was overturned because one party had inadvertently left without prejudice offers in the trial bundle.  Civil practitioners should not be too aloof – thinking that this is something that could only happen in the family courts. “Shall I put the Part 36 offer in the trial bundle?” is a search term that has led to this blog on many occasions.  I have seen several cases where a party’s reference to the adequacy (or inadequacy) of a without prejudice offer has had to be excised from witness statements.

“I have great sympathy with the judge. He was, in effect, handed a booby-trapped bundle containing a document that should not have been there. He was not given the help by the lawyers that he should have been given when he came to ascertain what the husband’s offer actually was but it does seem to me that faced with the sudden discovery, as he was, when preparing his judgment of a without prejudice offer, it was not open to him simply to rely on that. He should have referred the matter back to the parties to discuss what course he should take…”

THE CASE

The (ex) husband and wife sought financial awards following divorce.  Both parties made without prejudice offers for the purpose of a FDR (a without prejudice hearing where the parties see whether the matter can be settled). The rules for a FDR state that the parties must make without prejudice offers and those offers included in the bundle for the hearing.  A FDR took place, with the offers in the bundle.  The matter did not resolve.  A full hearing then took place (before a different judge). However the without prejudice offers were placed in this hearing bundle, at a time when the husband was a litigant in person. The judge made an award reliant, in part, on the matters set out in the without prejudice bundles.  The husband appealed and was given permission on this one issue.

THE JUDGMENT ON APPEAL

1. 1. It is necessary to touch on the law in relation to without prejudice documentation. Privilege is, of course, the privilege of the client and not of the solicitor or legal advisor. Privilege cannot be waived by solicitors on their own. The without prejudice rule governs the admissibility of evidence and is founded upon both the public policy of encouraging litigants to settle their differences rather than litigate them to a finish and the express or implied agreement of the parties themselves that communications in the course of their negotiations should not be admissible in evidence. That well-established principle has been approbated by the House of Lords in Rush & Tompkins Ltd v Greater London Council [1989] AC 1280.

1. 1. But, the privilege is not absolute and resort may be had to without prejudice material for a variety of reasons when the justice of the case requires it, always giving due weight to the purpose of the rule itself. That is made clear in Rush & Tompkins at p.1300. However, as is also made clear in the subsequent case of Somatra Ltd v Sinclair Roche & Temperley (A Firm) [2000] 1 Lloyd’s Rep 311, where it was held that while it is clear that legal privilege could be waived unilaterally, without prejudice privilege was effectively a joint privilege and could not be waived by one party alone. On the appeal of that case, the Court of Appeal held, allowing the appeal in part, that a party to litigation was not entitled to rely upon the contents of without prejudice discussions with another party in order to advance the case at trial unless subsequent conduct by the other party entitled it so to do.

1. 1. In this case the wife’s solicitors had inadvertently put before the court a bundle containing the husband’s without prejudice offer without any reference to him and without any discussion of it at any time.

1. 1. On Mrs Koukash’s behalf, counsel has provided written submissions for this appeal but has not appeared in order to save costs. He says the following and I will deal with them in turn. First, he says that the discussion that took place on 6 October showed that if there was a privilege, it had been waived and he expressly referred the judge to the offers without any objection being taken by Mr Koukash. As I have already mentioned, it does not seem to me that counsel’s submissions get anywhere near close to being explicit enough in order to found that submission. There is no reference to the fact that the offer was without prejudice and there was minimal discussion about it before the judge.

1. 1. Secondly, he says that the offers were in the bundle that had been before the judge on various occasions and thus it must be deemed that the husband had either agreed or acquiesced in them going before the judge. It does not seem to me that the precise contents of the bundle ever received the slightest attention before the trial started and it is not possible to draw from the fact that a letter was included in the bundle that this amounted to agreement to waiver of privilege or an acquiescence in such waiver.

1. 1. Thirdly, says counsel, the judge could have reached the same conclusions as he did from the other material before him. I accept that it is arguable that the judge might have reached the same conclusion although it would have been, it seems to me, difficult to mount in the light of the findings of fact that he has made in the judgment, particularly in the paragraphs between 61 and 68 and especially para.64. However, the fact is the judge made it clear in his judgment that he did rely on the without prejudice letter to reach the figure of £400,000 which was part of the £510,000. It would be wrong for me to go behind that and to say that the judge would have reached the same conclusion in any event. That is simply not a course that is open to me.

1. 1. I have great sympathy with the judge. He was, in effect, handed a booby-trapped bundle containing a document that should not have been there. He was not given the help by the lawyers that he should have been given when he came to ascertain what the husband’s offer actually was but it does seem to me that faced with the sudden discovery, as he was, when preparing his judgment of a without prejudice offer, it was not open to him simply to rely on that. He should have referred the matter back to the parties to discuss what course he should take, whether he should continue with the case himself, or how else he should proceed.

1. 1. It is with a very heavy heart that I have to allow this appeal because this litigation has gone on far too long and as the wife has said, she and the children remain trapped in what is the husband’s family estate. It is an eleven-bedroomed house, so I think I can use that term, and she is stuck there with the children because she has nowhere else to go. However, it does seem to me that in the circumstances, I have absolutely no alternative but to allow the appeal and remit the case.

1. I shall embargo publication of this judgment until after the rehearing of the case. I have asked the Family Division Liaison Judge to allocate a judge to take over its management and disposal. It would be too awful to contemplate a further hearing being compromised by the new trial judge reading this judgment.