English High Court Finds That Arbitrator Erred In Law In Finding Express 'Without Prejudice' Correspondence Admissible On Costs But Finds Impliedly 'Without Prejudice' Correspondence Admissible

In Sternberg Reed Solicitors v Harrison [2019] EWHC 2065 (Ch), the High Court decided that an arbitrator had made an error in law in deciding that he could consider correspondence marked “without prejudice” when deciding costs. However, correspondence that is impliedly “without prejudice” could be taken into consideration. Arbitrators usually have broad discretion when considering costs but the established English law rules on privilege will still limit what evidence of the parties' discussions is admissible. The court's decision on impliedly “without prejudice” correspondence is significant and may impact how parties to an arbitration (or litigation) react to settlement offers.

Admissibility of “without prejudice” communications

A detailed analysis and practical guidance following the court's findings on admissibility of expressly and impliedlywithout prejudice communication is explained in this post on our Litigation Notes blog. Parties to an arbitration should be mindful of the same issues. In particular, if correspondence is received which is aimed at settlement but is not stated to be "without prejudice", a...