Without Prejudice Letter Reveals Fundamental Dishonesty Undermining Claimant's Case

MORRIS v WILLIAMS [2025] EWHC 218 (KB)

The High Court ruled that a without prejudice letter containing an admission of fundamental dishonesty could be admitted as evidence, finding that the public interest in full disclosure outweighed the typical protections afforded to settlement negotiations, particularly where the claimant had effectively acknowledged misrepresenting aspects of his personal injury claim.

Having concluded that the Letter contains an admission that the Claimant has acted in a way that has been fundamentally dishonest, I must now consider whether it falls within the unambiguous impropriety exception such that I should allow it to be admitted as evidence. In my judgment the letter does fall within the unambiguous impropriety exception and should be admitted.

Citations

Rush & Tompkins Ltd v Greater London Council [1989] AC 1280 Without prejudice communications were inadmissible as evidence to encourage parties to negotiate settlements without fear that their statements would later be used against them. Cutts v Head [1984] Ch 290 The without prejudice rule was rooted in public policy to promote settlement discussions and prevent statements made during negotiations from being used prejudicially in litigation. Unilever PLC v The Procter & Gamble Company [2000] 1 WLR 2436 The unambiguous impropriety exception allowed without prejudice communications to be admitted if their exclusion would enable perjury, blackmail, or other misconduct. Foster v Friedland [1992] CAT 1052 The unambiguous impropriety exception applied only in clear cases of abusive use of without prejudice privilege. Hawick Jersey International v Caplan [1988] The Times, 11 March Without prejudice privilege could be lost where the statements made within settlement communications were used to conceal dishonesty or misconduct. Merrill Lynch v Raffa [2001] ILPr 31 The unambiguous impropriety exception applied where exclusion of without prejudice material would protect a party from admitting involvement in fraudulent conduct. Motorola Solutions Inc & Others v Hytera Communications Corporation Ltd & Another [2021] EWCA Civ 11 The unambiguous impropriety exception had to be applied strictly, and only in circumstances where privilege was being abused to cloak wrongdoing. Ocean on Land Technology (UK) Ltd & Another v Richard Land & Others [2024] EWHC 396 (IPEC) Privilege did not apply to without prejudice statements when they demonstrated conduct beyond the permissible scope of negotiations, such as clear admissions of serious misconduct. Ofulue v Bossert [2009] UKHL 16 The without prejudice rule extended fully to both oral and written negotiations, reinforcing the strong public interest in protecting settlement discussions. Berry Trade Ltd & Another v Moussavi & Others [2003] EWCA Civ 715 It was impermissible to dissect without prejudice communications to extract admissions while claiming privilege for the remainder, as this would undermine the purpose of the rule.

Track allocation housing disrepair CPR 46.13 settlement sum costs restriction SCCO

MRO fee markup cap 25% detailed assessment personal injury Senior Courts Costs Office

Security for costs refused CPR 25.27 very high probability success excessive estimate King's Bench

IPEC scale costs transfer Patents Court PD 30 para 9.2 costs caps Court of Appeal

Costs budget variation CPR 3.15A promptness significant development unfair prejudice Chancery Division

Costs budgeting inter partes proportionality high hourly rates AI disclosure Patents Court CPR 3E

Beneficiary personal liability section 71(3) Solicitors Act 1974 indemnity costs VAT self-supply SCCO

Summary assessment indemnity costs unless order payment on account disclosure default Chancery Division

Provisional assessment set aside CPR 3.1(7) points of dispute filing duty PD 47 para 14.3 SCCO

Fixed recoverable costs police claims CPR 26.9(10)(e) intentional tort exemption

Key Points

Without prejudice correspondence is protected from disclosure in legal proceedings to promote candid settlement discussions. However, the “without prejudice” rule is not absolute and may be overridden if exclusion of the evidence would permit “unambiguous impropriety,” such as an admission of dishonest conduct used to facilitate deceit in litigation. [7, 8, 21]
Evidence relating to settlement negotiations may only be admitted under the “unambiguous impropriety” exception when the alleged conduct rises clearly beyond the bounds of legitimate negotiation tactics and constitutes improper conduct, such as enabling perjury or promoting fundamentally dishonest claims. [9, 14, 21]
The court must construe the “unambiguous impropriety” exception narrowly, particularly at interim stages of proceedings, ensuring that the evidence clearly satisfies the high threshold of improper conduct before the protection attached to without prejudice communications is lifted. [13, 14]

When considering whether without prejudice material may be admitted as evidence, the court will assess whether admitting such material serves the public interest in ensuring a fair trial, which may override the public policy of promoting settlement discussions when mutual exclusivity exists. [7, 21]
The dissection of without prejudice correspondence is generally avoided, as selective analysis of settlement communications undermines the protected context. Nonetheless, clear admissions of improper conduct, such as fundamental dishonesty in the presentation of a claim, are exceptions when they satisfy the standard for unambiguous impropriety. [16, 19–21]

The 'without prejudice' rule is not absolute. There are exceptions and one of those relates to situations where to exclude material marked as without prejudice would act as a cloak for perjury, blackmail or other 'unambiguous impropriety'. This was explained by Robert Walker LJ in *Unilever PLC v The Proctor & Gamble Company* [2000] 1 WLR 2436... the exception should be applied only in the clearest cases of abuse of a privileged occasion.

Key Findings In The Case

The court found that the letter dated 12 May 2023, headed “Without Prejudice – Save as to Costs,” was intended to be protected under the without prejudice rule as it constituted an attempt to negotiate a settlement between the parties. However, the letter contained a clear admission of fundamental dishonesty by the Claimant in the presentation of his case. [17, 19]
The Claimant’s admission of fundamental dishonesty in the letter, though expressed in the context of potential settlement terms, was deemed sufficiently clear to fall within the “unambiguous impropriety” exception to the without prejudice rule, rendering the letter admissible as evidence. [19, 21]
The court concluded that the letter demonstrated conduct that went beyond legitimate negotiation tactics, as it effectively acknowledged that the Claimant’s case included fundamentally dishonest claims. Such conduct justified the admission of the letter under the exception to preserve the integrity of the judicial process. [21]

The judge found that withholding the letter from evidence would allow the Claimant to perpetuate a claim that was being pursued, at least in part, on false grounds, which would undermine the public interest in full and honest disclosure in litigation. [21]
The court determined that this case was analogous to prior cases, such as Merrill Lynch v Raffa, where the “unambiguous impropriety” exception applied to admit without prejudice material containing admissions of dishonesty, thereby enabling the court to ensure fairness and prevent abuse of the judicial process. [21]

Here the line has been crossed. If the Letter is excluded there is more than a risk of the Claimant perjuring himself, which would not of itself be sufficient to bring the exception into play, but the certainty that the Claimant’s pleaded case was being put forward on a (at least partly) false basis, which is sufficient to bring the exception into play. This is an example where the public policy arguments in favour of litigating disputes with full disclosure trump the policy argument in allowing parties to speak candidly and with protection of the contents of the discussions, to encourage settlements.

Background

The legal proceedings stem from a road traffic accident that occurred on 20 July 2018, involving Mr Keith Morris, the claimant, who was riding a motorcycle, and Mr William Simon Williams, the defendant, who was driving a vehicle. The accident was initially acknowledged as resulting from the defendant’s negligence, with the fundamental issue being the extent of injuries sustained by the claimant.

The defendant filed an amended defence on 6 April 2023, alleging fundamental dishonesty by the claimant. The defendant contended that Mr Morris had substantially exaggerated the effects and extent of his injuries, supporting this claim with surveillance footage purportedly demonstrating the claimant performing various daily activities inconsistent with his injury claims.

The procedural history reveals a complex legal journey, with the matter coming before District Judge Dodsworth on 22 January 2025. The specific application before the court concerned a Part 18 request and the potential admissibility of a letter dated 12 May 2023, which was marked “Without Prejudice – save as to costs”.

The letter, authored by Minster Law (the claimant’s solicitors), represented a Calderbank Offer attempting to settle the claim. Notably, the offer included a provision for the claimant to admit fundamental dishonesty, but only within the confines of a non-disclosure agreement preventing any public discussion of the case.

Costs Issues Before the Court

The primary costs issue centred on the admissibility of the without prejudice correspondence, specifically whether the letter could be introduced as evidence given its potential demonstration of fundamental dishonesty. The court was required to determine whether the letter fell within the narrow exceptions to the without prejudice rule, particularly the “unambiguous impropriety” exception.

The Parties’ Positions

The defendant argued that the letter should be admitted as evidence because it demonstrated the claimant’s acceptance of fundamental dishonesty. Mr Paul Higgins, counsel for the defendant, referenced previous cases such as Merrill Lynch v Raffa, where without prejudice communications were admitted to prevent potential fraud.

Conversely, the claimant, represented by Mr David Morris, contended that the letter did not constitute a clear admission of fundamental dishonesty. He emphasised the need to construe the unambiguous impropriety exception narrowly, particularly at an interim stage of proceedings, citing authorities including Motorola Solutions Inc v Hytera Communications Corporation and Ocean on Land Technology v Richard Land.

The Court’s Decision

District Judge Dodsworth carefully examined the legal principles governing without prejudice communications, drawing on established precedents such as Rush & Tompkins Limited v Greater London Council and Unilever PLC v The Proctor & Gamble Company.

The judge ultimately determined that the letter did contain a clear admission of fundamental dishonesty. Despite the future-tense language, the court viewed the letter as substantively admitting potential misrepresentations in the claim. Crucially, the judge found that excluding the letter would permit the claimant to pursue a case known to be, at least partially, false.

Applying the unambiguous impropriety exception, the court ruled that the public interest in full disclosure outweighed the protection typically afforded to without prejudice negotiations. The letter was therefore allowed to be adduced as evidence, a decision analogous to the approach in Merrill Lynch v Raffa.

Specialist costs services across the UK

TMC Legal provides expert costs drafting, negotiaton and costs budgeting services together with representation in detailed assessment hearings. Our experienced costs lawyers and law costs draftsmen act nationwide. Contact us today.