Trying to Settle a Dispute?
Conversations with solicitors that are designed to achieve a compromise of legal proceedings are generally without prejudice and admissions made cannot be relied upon in court. In an important decision, the Court of Appeal has analysed the extent of that rule in the context of a landlord and tenant dispute.
The landlord of a restaurant had re-entered the premises and changed the locks. The tenants, who denied that their rent was in arrears, claimed that the lease had been wrongly forfeited. Before the matter came to court, one of the tenants had twice made appointments with the landlord’s solicitor, during which she was said to have made admissions which were damaging to their case.
A judge found in favour of the landlord and the tenants were ordered to pay almost £6,000 in outstanding rent. In reaching that decision, the judge took account of the tenant’s alleged admissions on the basis that her meetings with the solicitor did not benefit from without prejudice privilege.
In allowing the tenant’s appeal, however, the Court found on the evidence that the purpose of the meetings was to find some way of settling the litigation. The words the tenant spoke to the solicitor were thus privileged and, on the face of it, inadmissible in court. In those circumstances, the Court directed a re-trial of the action before a different judge.