Scheldebouw B.V v M Evanson

“On 20^th September 2018, the Claimant had a meeting in London to discuss his possible retirement, his outstanding holiday entitlement and his car allowance. It was agreed that the issue of the Claimant’s potential retirement would be reviewed in December 2018 along with his outstanding holiday entitlement. Discussions were held between the parties to attempt to amicably resolve the issue of the outstanding holiday entitlement accrued by the Claimant which led to an offer by the Respondent to pay the Claimant for 168 days of accrued holiday (equating to £68,199.60) which was rejected and a counter offer proposed for 200 days (equating to £81,190.00) by the Claimant. This offer was accepted by the Respondent. Ultimately negotiations broke down in February 2019, over other issues.]”

Prior to December 2018, the parties were not in dispute. Accordingly, the discussions and correspondence between the parties that pre-date December 2018 were not “without prejudice”/privileged and may be relied on in evidence before the Tribunal at the Full Merits Hearing.

Paragraph 12 of the Claimant’s claim accordingly remains as drafted (subject to the redaction proposed by the Claimant in the email from his solicitor of 17 January 2020).”

Before me the Respondent has been represented by Ms Georgina Leadbetter of Counsel and the Claimant by Mr Paras Gorasia of Counsel. I am grateful to them both for their clear, thorough and helpful submissions. This case has been argued with conspicuous skill on both sides.

The relevant legal principles

There is no dispute that “without prejudice” privilege applies to proceedings in the ET. The legal principles that apply to “without prejudice” privilege is now well-established, and parties are not significantly in disagreement about them, although there are differences in emphasis. The authorities stress that the application of the principles is fact-specific and their application to an individual case can often give rise to difficulty. This applies especially to the question as to the point at which the “without prejudice” privilege comes into being. That is the issue that arises in the present case.

In a family case, BE v DE [2014] EWHC 2318 (Fam), at paragraph 20, Mr Justice Bodey helpfully summarised the relevant principles, which were taken from Phipps on Evidence, 18^th edition, as follows:

In A v B & C [2013] UKEAT/0092/13, on 10^th April 2013 Mr Justice Keith indicated that it was sufficient for “without prejudice” privilege to apply that one of the parties might reasonably have contemplated that litigation was at least a possibility if a compromise could not be reached. However, Ms Leadbetter rightly emphasises that this does not detract from the position that the test is an objective one and that the Employment Judge should not focus solely on the subjective views of one or other party.

The leading authority on “without prejudice” privilege is now Barnetson v Framlington Group [2007] EWCA Civ 502 [2007] ICR 1439. This was an appeal from an employment tribunal. The leading judgment was given by Lord Justice Auld, with whom Lord Justices Longmore and Toulson agreed. At paragraphs 27 LJ Auld stated that:

At paragraph 29 of his judgment, LJ Auld said that:

Auld LJ gave guidance about where the line should be drawn in cases in which proceedings have not yet been commenced in paragraphs 32 to 34 of his judgment, which are worth setting out in full:

Accordingly, the matter is highly case-sensitive. It is wrong to apply a temporal test; that is, how far in advance of litigation commencing the communication took place. The key question, as identified by LJ Auld, is whether, in the course of negotiations, the parties contemplated or might reasonably have contemplated litigation if they could not agree. If so, the privilege applies; if not, the privilege does not apply.

In the Framlington case itself, the Court of Appeal held that the privilege applied because (to use the words of Auld LJ) at the time the disputed communication was made, the parties were already well and truly at odds as to the claimant’s contractual entitlement (see paragraph 36). He added at paragraph 37:

At paragraph, 38 Auld LJ stated:

In the passage I have just cited, LJ Auld referred to the “opening shot” principle. This had previously been referred to in Standrin v Yenton Minster Homes Ltd (The Times) 22nd July 1991. In that case, Lloyd LJ stated that:

In my view, though, the “opening shot” principle is subordinate to the test as set out in Framlington. The fact the parties are making proposals to each other is relevant, but it does not conclusively establish that the “without prejudice” privilege applies. Such proposals may be made in discussions and yet the parties are neither contemplating litigation or reasonably contemplating litigation. In a standard commercial negotiation, there will be offers and counter-offers but without the contemplation of litigation.

The next authority that is worth mentioning in relation to the “without prejudice” privilege is the EAT judgment in Portnykh v Nomura International PLC [2014] IRLR 251. At paragraphs 34 and 35, His Honour Judge Hand QC stated:

This shows that “without prejudice” privilege can attach to something that can be described as a “potential dispute” but the key point, in my view, is that there must be actual or reasonable contemplation of litigation as identified in Framlington.

Finally, in Faithorn Farrell Timms LLP v Bailey [2016] ICR 1054, Her Honour Judge Eady QC (as she then was) stressed that whether or not a communication is protected by “without prejudice” privilege does not depend upon whether the communication contains the words “without prejudice”.

The Employment Tribunal’s treatment of this issue

The Employment Tribunal referred to the key authorities in section 5 of the Judgment. At paragraph 5.2, the Employment Judge set out the key guidance in the Framlington case; namely, that the crucial consideration is whether, in the course of negotiations, the parties contemplated or might reasonably have contemplated litigation if they did not agree. No criticism is or could be made of the review of the authorities in this part of the Judgment.

Findings of fact in the Judgment

The Employment Tribunal heard evidence from the Claimant and from two employees of the Respondent, Mr Calzolari and Mr Beukers. It was Mr Calzolari, the Respondent’s General Manager, who had been engaged in discussions with the Claimant about the termination of his employment. The Employment Tribunal did not find the Claimant to be as reliable as Mr Calzolari in his evidence and, in particular, in his evidence as to the timing when he began to contemplate litigation as a real possibility. This assessment of the Claimant’s evidence is, of course, not open to challenge and, in any event, it is in the Respondent’s favour.

The Claimant had worked for the Respondent from 17^th January 2005 onwards and, at the time of his dismissal on 19^th March 2019, he was the Chief Risk Officer. There is no suggestion that his dismissal had anything to do with misconduct or reprehensible behaviour on his part; it was simply that the need for the services he provided had declined. Whether or not the Claimant was redundant by reference to the statutory definition of redundancy is immaterial; the Respondent decided that he was no longer needed. The Employment Tribunal found that the first meeting between the Claimant and Mr Calzolari to discuss terms for the termination of the Claimant’s employment and related financial matters was on 12^th October 2018 (see Judgment, paragraphs 7.16 and 7.18).

The Claimant had alleged there had been a previous meeting on 20^th September 2018, but the Employment Tribunal preferred Mr Calzolari’s evidence on this. In the event, nothing rests on this difference of recollection.

It was confirmed before me by both Counsel that the Employment Tribunal proceeded on the basis that it was at the meeting on 12^th October 2018 that the suggestion by the Respondent that it would pay £68,199.60 for accrued holiday pay was made. The Employment Tribunal found as a fact that, at this meeting on 12^th October 2018, there was no dispute between the Parties; no minutes were taken; and there was no suggestion by either Party that it considered the matter to be “without prejudice”. The Employment Tribunal stated that each appears to have put in an “opening shot” only about the amount of holiday pay that the Claimant may have been entitled to upon termination of employment. At paragraph 6.7, the Employment Tribunal stated that the Claimant and Mr Calzolari:

It was agreed that a settlement agreement would be drawn up and the parties agreed, at Mr Calzolari’s suggestion, to keep the matter confidential. The correspondence that followed between the parties was not marked “without prejudice” by either side (see paragraph 7.19).

On 23^rd October 2018, Mr Calzolari sent an e-mail to the Claimant in which he set out the “gentleman’s agreement” that they had reached (paragraph 7.18). This confirmed Mr Calzolari’s understanding of the outstanding holiday pay entitlement but did not refer to matters such as pension, car allowance or pay in lieu. Mr Calzolari proposed that the Claimant’s employment would end on 31st December 2018. In a telephone conversation on the same day, mutual agreement was reached on three of the four outstanding points, leaving only the annual leave issue to be determined between the parties.

On 24^th October 2018, there followed e-mail correspondence between the Claimant and Mr Calzolari, after which Mr Calzolari asked Mr Beukers to produce a draft settlement agreement. Then on 12^th or 13^th December 2018, there was a meeting between the Claimant and Mr Calzolari at Dusseldorf Airport at which Mr Calzolari provided the Claimant with written draft settlement terms. This was the first time that a draft settlement agreement had been provided. On 17^th December 2018, the Claimant responded with a written counter-settlement agreement. In the event, agreement was not reached, and the Claimant was dismissed on 19^th March 2019, with the dispute relating to holiday pay unresolved.

The Employment Judge found that before the 12^th October meeting there was no particular reason for an expectation that the Respondent would be sued and, hence, litigation was not in Mr Calzolari’s contemplation. He was aware of the possibility of litigation due to his commercial experience. However, there was no particular reason for it to be in his contemplation at that time (paragraph 7.13 and 6.14). Even after 12^th October, the Tribunal found that Mr Calzolari did not think it necessary to take legal advice other than to formalise what the Parties had verbally agreed (paragraph 7.13).

The Employment Tribunal also found that there was no dispute about whether the Claimant’s employment should end; the dispute was not about whether to end the Claimant’s employment or, particularly, about when to do so, but arose in connection with the financial settlement. The Employment Judge held that there appeared initially to have been little dispute about what the parties were prepared to agree to (paragraph 7.1). It was not until the Draft Settlement Agreements began to be exchanged that the dispute between the parties became clear. Indeed, up until that point, such disagreements as there were related to commercial matters, which were not to do with the terms of the agreement for the termination of the Claimant’s employment.

The Employment Tribunal said, also, that there was no potential stigma surrounding the termination of the Claimant’s employment (see paragraph 7.12). At paragraph 7.14, the Employment Judge said:

At paragraph 7.16, the Employment Judge concluded that, whether there had been two meetings, in September and October 2018, or just one on 12^th October 2018, there was no dispute between the parties at that stage. Each put forward their “opening shot” only. At this stage, the Claimant was awaiting Mr Calzolari’s offer on holiday pay when the latter had thought about it.

Summary of the Employment Tribunal’s findings

It is fair to say, with respect to the Employment Judge, that the Employment Tribunal’s findings and conclusions are not entirely easy to follow because the section of the Judgment which deals with them at times mixes together findings of primary fact; conclusions based on findings of primary fact; and comparisons between the present case and other important cases on “without prejudice” privilege. Also, the findings of fact are not set out in a purely chronological manner. As a result, the reasoning of the ET requires some unpicking.

Nonetheless, in my judgment, it is clear that the Employment Tribunal found the “without prejudice” privilege did not come into existence until the first Draft Settlement Agreement was given to the Claimant at the meeting at Dusseldorf Airport on 12^th or 13^th December 2018, and not at the earlier stage of the meeting on 12^th October or at the date of the subsequent exchange of e-mails late in October and the reasons for this conclusion were the following:

I should add that, even if the earlier date of around 24th October were the right one for the commencement of “without prejudice” privilege, the conclusion on the “without prejudice” privilege issue relating to paragraph 12 of the Claim Form would remain the same. As the material set out in paragraph 12 (which the Respondent wishes to exclude) refers to the discussions on 12th October 2018 (which the Claimant says happened even earlier, on 20th September 2018). So, in any event, even if the alternative construction should be applied to the Tribunal’s reasons, the “without prejudice” privilege did not arise until 24th October, after 12th October meeting.

The Appeal

It is trite law that the Employment Appeal Tribunal can only overturn the Employment Tribunal’s ruling on a matter such as this if the Employment Judge has misdirected herself in law, or if the findings of fact or conclusion reached upon the findings of fact are so irrational as to be perverse. It is also trite that the threshold for a perversity appeal is a very high one (see Yeboah v Crofton [2002] IRLR 635).

In the present appeal, Ms Leadbetter’s primary case is that the Employment Tribunal misdirected itself in law. She does not submit that EJ Norris expressly misdescribed or misinterpreted the relevant authorities in her Judgment, but she submits that, at the heart of the Appeal is that the Tribunal erred in law in having put the pass mark for “without prejudice” privilege being engaged significantly too high. She says that, where the Respondent criticises the position taken by the Tribunal on the facts, it is on the basis that the Tribunal failed to take into account undisputed evidence and/or drew conclusions contrary to its own factual findings. In other words, to the extent that the Appeal is a perversity charge, Ms Leadbetter emphasises that she is not challenging the primary findings of fact of the Employment Tribunal but is contending for the conclusions drawn from the primary findings of fact were perverse.

On behalf of the Claimant, Mr Gorasia submits that the Employment Tribunal applied the law as set out in Framlington and that the Appeal is, essentially, a perversity challenge to the findings made by the Employment Tribunal or an attempt to appeal on the basis of nit-picking criticisms of isolated passages in the Judgment.

I will deal with the five Grounds of Appeal in turn.

Ground 1:

This is that the Tribunal erroneously focussed exclusively on whether litigation was contemplated, in particular, by Mr Calzolari, thus neglecting to apply the full test in Framlington, which requires that consideration be given to whether, in the course of negotiations, the parties contemplated or might reasonably have contemplated litigation if they could not agree.

I do not accept this submission: The Employment Judge directed herself that she should apply the Framlington approach at paragraph 5.2 of the Judgment, and that is what she did. She gave reasons in the Judgment as to why neither the Claimant nor Mr Calzolari would reasonably have been contemplating litigation if agreement wasn’t reached until 12^th December 2018. These included that there was no hostility or threat of dismissal on grounds that would potentially stigmatise the Claimant; that there was no use of the words “without prejudice” by either party, which was not conclusive as relevant; and that the reality was, in the Tribunal’s view, that the Parties were amicably moving on towards a settlement of a straightforward separation agreement until things went wrong in mid-December 2018. These reasons apply equally to the Claimant and to Mr Calzolari. It was not necessary for the Employment Tribunal to make an express finding about the state of mind of the Claimant as the test is, ultimately, an objective one. The reason why the Employment Tribunal focussed more on Mr Calzolari’s attitude was that it had been submitted, on behalf of the Respondent, that the very fact that Mr Calzolari talked about preparing a settlement agreement at the 12^th October meeting shows that he must have anticipated the potential for litigation as early as that date.

It is also worth noting that the Employment Tribunal did not accept the Claimant’s evidence. At paragraph 7.6, the Employment Tribunal directed itself quite properly that, when doubting the credibility of a witness’ evidence, it is essential to test the veracity of the evidence by reference to the facts proved independently of the witness’s testimony. This was the right approach. The fact that the Employment Tribunal did not accept the Claimant’s evidence did not mean, in particular, that it had to reject his argument that “without prejudice” privilege did not arise until December 2018. It is not a valid criticism of the Tribunal, in these circumstances, to say that it gave undue weight to Mr Calzolari’s views and I do not accept Ms Leadbetter’s submission that the only realistic finding for the Tribunal to make on its findings of primary fact was that the Claimant might reasonably have contemplated litigation as early as 12^th October 2018 if the discussions did not reach an amicable conclusion. It is clear that the Tribunal thought that, at this stage, both Parties considered that an amicable conclusion would be reached in this matter. The Tribunal gave ample reasons for this conclusion (which I have summarised above) and there are also reasons why the parties had not given any thought to the possibility of litigation at that stage.

Again, I do not accept Ms Leadbetter’s submission that the Tribunal lost sight of the fact that the test for the “without prejudice” privilege is objective rather than subjective. There was no misdirection and the conclusion reached was not perverse. As I have said, the Tribunal’s Judgment was, arguably, somewhat disorganised in its structure, but the conclusions that the Employment Judge reached are nonetheless clear. The fact that, as the Tribunal found at paragraph 7.13, Mr Calzolari was aware of the possibility of litigation in the light of his general commercial experience, does not contradict or detract from the Tribunal’s conclusion that, in relation to the Respondent’s discussions with the Claimant, he was not contemplating litigation. The Tribunal was entitled to find that the proposal that there be a settlement agreement was the result of commercial good sense and caution, not the result of fear of litigation in a particular case. Experienced people will be aware that there is always some theoretical risk of litigation arising out of almost everything they do. That does not mean that they are contemplating litigation every time they become involved in discussions.

I have already dealt with the suggestion that there is an inconsistency in the Judgment on the basis that there are passages which suggest that the “without prejudice” privilege came into being on or about 24^th October 2018 and passages which suggest that the privilege came into being on or about 12^th December 2018. For the reasons that I have given, I do not accept that there is such an inconsistency in the Judgment. Properly understood, it is clear that the Employment Judge concluded that the “without prejudice” privilege applied from the time of the meeting at Dusseldorf Airport on 12^th or 13^th December 2018, and this is reflected in the operative part of the Judgment. In any event, as I have already said, any such inconsistency or uncertainty would not give rise to a ground of appeal. Whichever of the two dates is the right one, the Respondent’s claim, to the effect that the discussions on 12^th October are covered by “without prejudice” privilege, will fail.

Put bluntly, even if, contrary to my view, the Employment Judge can be criticised for inconsistency on this issue, none of this supports the contention that her ultimate decision on the “without prejudice” privilege was an error of law and can be set aside. Furthermore, I do not accept that the submission that the Tribunal fell into the trap of focussing on when the parties did, in fact, fail to agree, rather than when they might have reasonably contemplated litigation if they, ultimately, could not reach agreement. It is absolutely clear from the terms of the Judgment, in my view, that the Employment Judge had the right test clearly in mind and took the view that, it was only when the attitudes hardened, in December 2018, the possibility of litigation presented itself to either side as a possibility.

Again, there is no basis, in my judgment, for the contention made by the Respondent that the Employment Judge fell into the trap identified in the Nomura case of directing herself that some degree of hostility is necessary for the “without prejudice” privilege rule to be engaged. Nothing in Nomura prevents an employment tribunal from taking account of the background context and subject matter of the discussions which, in this case, are perfectly amicable. This is a relevant consideration when deciding whether litigation is reasonably in contemplation, even though overt hostility is not required. In Framlington, the Court of Appeal took account of the subject matter of the discussions when deciding if “without prejudice” privilege existed (see paras. 37 and 38 of the Judgment), so did the judge in Nomura (at paragraph 34). In that case, HHJ Hand QC noted that, if the discussion was about dismissal for misconduct, it would be likely that litigation would be in the parties’ reasonable contemplation from the outset.

Once again, I do not accept the criticism that the Employment Tribunal found the “without prejudice” privilege had not been engaged, simply because the Parties were still in discussion. It is clear that the Tribunal took the view that, whilst discussions were taking place, it was not until December 2018 that the litigation was in reasonable contemplation. Ms Leadbetter points out that, at paragraph 7.13, the Employment Tribunal stated that there was no particular reason for an expectation that the Respondent would be sued and, hence, litigation was not in its contemplation. She said that this places the bar too high.

I do not think that this is a fair reading of the Judgment. That observation should not be read in isolation; as I have said, looking at the Judgment as a whole, it is clear that the Employment Tribunal applied the correct Framlington test, and it is relevant to consider whether litigation was actually in the Respondent’s contemplation. I do not think that the Judgment is tainted by a failure to appreciate any metaphysical distinction between expectation and contemplation. I say, once again, that the Tribunal directed itself to apply the Framlington test and did so.

As Ms Leadbetter submitted, it is, on the face of it, somewhat surprising that the offer made by the Respondent is not covered by “without prejudice” privilege but the offer made by the Claimant is. However, for the reasons given by the Employment Judge, an explanation was provided for this and that explanation is not perverse. Ultimately, the Tribunal was entitled to conclude that, as of October 2018, the was (to use the words of the BE case) “no reasonably cohate and definable issue or series of issues, not just a number of reciprocal differences or grievances which might or might not prove soluble with reflection and discussion.” It is clear here that the Tribunal considered that that is, indeed, what there was: a number of reciprocal differences or grievances that might or might not prove soluble with reflection and discussion.

Ground 2:

This is that the Tribunal erroneously applied the “opening shot” principles and/or reached a conclusion on this point that was perverse in the light of its own factual findings.

I do not accept that the Employment Tribunal erred in law in its understanding or application of the “opening shot” case law. In fact, in the present case, the “opening shot” case law is of limited relevance; the key is that the Employment Judge applied the Famlington test. She was entitled to conclude that there was no contemplation of litigation, even though the Parties had set out their respective positions at the 12^th October 2018 meeting. The Tribunal found that this did not lead to a dispute on holiday pay for which litigation was then in reasonable contemplation. Rather, it was left that Mr Calzolari would go away to think about the issue and let the Claimant know what he came up with. This was the subject of express findings in paragraph 7.16 of the Judgment.

The mere fact that the Claimant offered to accept less than his potential maximum legal entitlement does not mean that he or Mr Calzolari were contemplating litigation or could reasonably be contemplating litigation at the time of the 12^th October meeting.

Ground 3

The Tribunal failed to make any finding that the Claimant had used the words “without prejudice” in his counter-agreement and, to the contrary, perversely held that “neither man labelled the meeting or their ensuing correspondence “without prejudice””. As Ms Leadbetter accepts, fairly, this is a perversity ground.

I do not accept this ground. The Employment Tribunal accepted at paragraph 7.1 that it would make minimal findings of fact because the definitive findings will follow the Full Merits Hearing. Ms Leadbetter doesn’t criticise this but says that the Tribunal went too far in so doing and did not make enough findings. I do not accept this submission; the Tribunal gave sufficient findings to explain and justify its conclusions, as I have set out above.

The question that the Tribunal had to focus upon was whether there was “without prejudice” privilege at the time of the meeting on 12^th October 2018. It was not suggested, and certainly not found by the Tribunal, that either party used the words “without prejudice” at that meeting or in the weeks that followed, even though the Claimant had some legal training. It was relevant that they did not, as that gives an insight into their positions, even though, as the EAT has made clear in the Faithorn case, this is not determinative; the fact that the phrase “without prejudice” was used in the Claimant’s counteroffer in December is neither here nor there. The Tribunal accepted that, by that stage, “without prejudice” privilege existed.

I do not think that it is a fair criticism of the Tribunal to say that the Tribunal should have expressly considered whether the inclusion of this wording in December 2018 sheds light on the Claimant’s attitude to the discussions in October. It was much more significant that, in the communications later in October (following the 12^th October meeting), neither the Claimant nor the Respondent made any reference to that “without prejudice”.

Ground 4

This is that the Tribunal erroneously considered or concluded that there was no dispute as to termination, on the basis that there was no dispute as to the potential reason for termination, notwithstanding that the terms for potential termination were potential matters of dispute. The Respondent submits that, in doing so, it failed correctly to apply Nomura principles, and, in the alternative, Ms Leadbetter submits, that the Tribunal’s conclusion, that there was no dispute as to the potential reason for termination, was perverse.

In my judgment, this Ground amounts to an overly critical analysis of the Tribunal’s Judgment. The Tribunal was entitled to take into account that, as of 12^th October 2018, there was no risk of a fault-based dismissal of the Claimant. This was a different class of case which one often sees in a case of senior executives; the employer no longer wants or needs the executive, though this is no reflection on his abilities. In those circumstances, albeit with perhaps understandable reluctance on the part of the employee, the parties discuss appropriate terms for leaving. In the vast majority of cases, this will not lead to litigation and, in many cases, neither party, when entering the discussions, will think for a moment that they will lead to litigation.

The Employment Tribunal was entitled to conclude that this was the position in the present case. The Tribunal was also entitled to take into account that there was no allegation of a fault-based ground for dismissal. If there had been, then the stakes would have been infinitely higher, and it might well be that the Parties would start contemplating litigation at an earlier stage.

In the present case, the Tribunal took the view that the parties were discussing matters (such as outstanding holiday pay entitlement) that they fully expected to resolve, and so they were not contemplating litigation until their positions hardened, in December 2018, after exchange of draft agreements.

This conclusion was consistent with Framlington and the other authorities and was one which was not perverse on the facts of the case; the Tribunal was entitled to point out that this case was different from the Nomura case because there was no threat of a misconduct dismissal floating in the background to raise the temperature and direct the Parties’ minds towards litigation. In Nomura (as I have said), HHJ Hand QC regarded the fact that there was a threat of misconduct dismissal as being a strong indication that litigation would have been in the reasonable contemplation of the parties. That did not apply here.

The Tribunal was entitled to find in the present case, as it did at para. 7.10, that the scope of the disagreement was a narrow and, apparently, readily resolvable one; namely, a disagreement about holiday pay. The Employment Tribunal referred at some length to the Nomura case in its Judgment but that was because it was relied upon by the Respondent’s then-Counsel. Each case depends on its own facts, as Framlington makes clear, and the Tribunal was plainly right to distinguish Nomura from the present case.

Ms Leadbetter also submits that the Employment Tribunal misdirected itself about Nomura because the Tribunal did not take on board the proposition to be derived from Nomura, that “without prejudice” privilege may apply even if there is no actual dispute. She points out that, at para. 1 of the operative part of the Judgment, the Employment Tribunal stated that “prior to December 2018, the parties were not in dispute” and she suggests that this shows the Tribunal felt that, if the Parties were not in dispute, then, ex hypothesi, “without prejudice” privilege did not apply.

I do not accept that this is a fair criticism of the Tribunal’s reasoning; it is clear that, in the operative part of the Judgment, the Tribunal was using the phrase that “the parties were not in dispute” as a shorthand for meaning that there was no contemplation or reasonable contemplation of litigation. Taken as a whole, it is clear that the Tribunal was applying the right test; a dispute can arise even if there is no final breakdown in negotiations, and so “without prejudice” privilege can arise even before such a final breakdown. However, in this case, the Tribunal plainly took the view that the nature of the discussions at the time, prior to December 2018, did not indicate that the Parties were contemplating or could reasonably have contemplated litigation.

Ground 5

This is that the Tribunal’s conclusions as to when a dispute arose are internally inconsistent, in particular, given that the Tribunal appears to have found that:

Ms Leadbetter accepts that, even if 24^th October was the right date, it wouldn’t get her home on the “without prejudice” privilege point because the matter she seeks to exclude relates to what was said earlier on 12^th October but, she submits, that this error and lack of clarity is so fundamental that it fatally undermines the Employment Tribunal’s Judgment and means that it cannot be relied upon. As she put it, this was a point at the very heart of the decision.

I have already dealt with this point. For the reasons I have already given, it is clear from the Judgment as a whole that there was no such internal inconsistency. The Tribunal found that a dispute giving rise to “without prejudice” privilege arose in December 2018 and not before.

Conclusion

For the above reasons I reject the contention that the Employment Tribunal erred in law by making the ‘pass mark’ for “without prejudice” privilege too high. Whilst the Judgment of the Tribunal might have been clearer in some places than it was, the outcome and the reasons for it are clear from the Employment Tribunal’s Judgment, and the Tribunal did not err in law or come to a perverse decision in its rule.

For these reasons, the Appeal is dismissed.