Settlement talks with your employer are protected, so you can speak freely.
“Settlement talks are protected: nothing said in them can be used against you if talks fail.”
Genuine settlement talks with your employer are protected, so you can speak honestly without it being held against you if the talks fail.
- You can make an offer or explain your position in settlement talks without it being used as an admission if the case later goes to tribunal.
- The protection is not unlimited. It does not cover fraud, or things like clear evidence of discrimination raised during the talks.
- If you are unsure whether a conversation counts as protected, or the stakes are high, get advice before you negotiate.
The situation
In 1927, two companies were locked in a patent dispute that had reached the courts. As so often happens, the parties also tried to negotiate a settlement alongside the litigation. The question this raised was simple but important. If a settlement conversation breaks down, can what was said in it be used as evidence against you later.
The case itself is old, and the surviving record of it is thin. What has lasted, and what every later case builds on, is one clear statement of principle from the judgment. It is worth knowing where the rule came from, even if the original dispute itself is mostly forgotten.
What the court found
The judge ruled that the answer has to be no. Parties should be encouraged, in the judgment's words, "fully and frankly to put their cards on the table" when trying to settle a dispute. If people had to weigh every word in a settlement conversation for fear it might be quoted back at them in court, they would stop negotiating altogether, and far more disputes would end up in lengthy, costly hearings.
This became the founding statement behind what lawyers call the "without prejudice" rule: genuine settlement talks cannot be used against you in later proceedings, whatever label was put on them at the time. Two cases turned that principle into settled law. The Court of Appeal applied it in Cutts v Head in 1984, and five years later the House of Lords went further in Rush & Tompkins v Greater London Council, holding that the protection does not depend on the words "without prejudice" ever being used.
Chancery Division · 1927