Cloak of prejudice

Woodward v Santander

It is quite common for negotiations to be conducted “without prejudice” so that nothing mentioned during those discussions can be used in evidence against either party at subsequent proceedings. In Woodward v Santander, the Employment Appeal Tribunal (EAT) said that the only exception to the rule was when it might “act as a cloak” for perjury, blackmail or some other “unambiguous impropriety”.

Basic facts

Mrs Woodward brought claims of unfair dismissal and sex discrimination against Santander in 1994. The company settled with her in 1996 but refused to provide a reference for her.

In the years following the settlement, she struggled to find and keep other work. In October 2002 she wrote to Santander complaining that the company’s refusal to provide her with a reference was scuppering her efforts to get another job.

She then brought more claims alleging victimisation, direct sex discrimination, and detrimental treatment for whistleblowing in early 2003.

The tribunal initially dismissed all her claims but after a series of successful appeals (some of which went as far as the Court of Appeal), her claims were re-heard at a fresh hearing on 19 January 2009.

However, after exchanging witness statements on 15 January, Santander said it wanted to exclude information in Mrs Woodward’s statement alleging that, in the course of the 1996 negotiations, it had refused to provide her with a reference on the ground that the information was “without prejudice”.

She argued that following the decision in the case of BNP Paribas v Mezzotero, she could rely on an exception to the rule of “unambiguous impropriety”.

Tribunal decision

However, the tribunal disagreed. It concluded that just because she had asked Santander for a reference which it had refused to provide, “was not something that we thought could be described as improper to any degree, by itself. We came to that conclusion having regard to (but taking as liberal a view as we could of) the natural meaning of the word “impropriety” standing alone, even before having regard to the appearance of it in the term “unambiguous impropriety” and the wider phrase as is often referred to: “perjury, blackmail or other unambiguous impropriety”.

EAT decision

And the EAT agreed. It said that the existing exception of impropriety applied only in the very clearest of cases and should not be expanded just because someone alleged discrimination. To do so “would have a substantial inhibiting effect on the ability of parties to speak freely in conducting negotiations”.

In this case, the impropriety was not clear and Ms Woodward could not therefore claim an exception to comb through the correspondence and/or discussions she had had with Santander to point to words or actions in support of “an inference of discrimination”

The EAT said that the exception had been applied successfully in the Mezzotero case because the impropriety was so clear. It had not created a new rule about discrimination cases or expanded the exception further.