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In
BGC Brokers LP and others v Tradition (UK) Ltd and others [2019] EWCA Civ 1937
the Court of Appeal dismissed an appeal against an order allowing inspection of a Settlement Agreement between the claimant and the third defendant.
The claimant was resisting inspection on the grounds of without prejudice privilege, or alternatively litigation privilege.
In the Settlement Agreement, the third defendant warranted that he had provided full and frank disclosure of the confidential information he had supplied to others, as set out in various documents listed in the agreement, including a particular email which was identified by subject matter, sender and recipient, time of sending and date.
The agreement also provided that the documents listed, including the email, retained without prejudice privilege, save that the parties could waive it in the event of breach of the agreement.
Several of the other defendants had applied for inspection of the unredacted Settlement Agreement and of the email, which they submitted was incorporated into the agreement by reference.
The court set out the principles re without prejudice privilege, holding that a Settlement Agreement, resulting from without prejudice negotiations is not covered by without prejudice privilege.
As the purpose of the Settlement Agreement was not to negotiate but to conclude a settlement of the dispute, it was not covered by without prejudice privilege, and as the email was incorporated into the agreement, it also ceased to be protected by without prejudice privilege.
Incorporating it changed its status from being inadmissible to being the legal foundation of a potential claim for breach of warranty.
Regarding litigation privilege, the court held that the purpose for which the earlier communications, including the email, were incorporated into the Settlement Agreement by the claimant was to obtain the benefit of the third defendant ‘s warranties and the ability to sue him if they were inaccurate.
This was a different purpose to the purpose of evidence gathering which had informed the making of the earlier communications, and the two purposes were not part of a “single wider purpose”.
