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Lord Griffiths said at page 1299,

The “without prejudice” rule is a rule governing the admissibility of evidence and is founded upon the public policy of encouraging litigants to settle their differences rather than litigate them to a finish. It is nowhere more clearly expressed than in the judgment of Oliver L.J. in Cutts v. Head [1984] Ch. 290 (see different post under this tag)…

The rule applies to exclude all negotiations genuinely aimed at settlement whether oral or in writing from being given in evidence.

A competent solicitor will always head any negotiating correspondence “without prejudice” to make clear beyond doubt that in the even of the negotiations being unsuccessful they are not to be referred to at the subsequent trial.

However, the application of the rule is not dependent upon the use of the phrase “without prejudice” and if it is clear from the surrounding circumstances that the parties were seeking to compromise the action, evidence of the content of those negotiations will, as a general rule, not be admissible at the trial and cannot be used to establish an admission or partial admission. I

cannot therefore agree with the Court of Appeal that the problem in the present case should be resolved by a linguistic approach to the meaning of the phrase “without prejudice.”

I believe that the question has to be looked at more broadly and resolved by balancing two different public interests namely the public interest in promoting settlements and the public interest in full discovery between parties to litigation.

Edited for ease of reading.

 

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