Last updateTue, 24 Feb 2015 5pm

DRAFTING: Unintended consequences

28 January 2011  

Tim Hardy investigates practical considerations in the light of the decision in Oceanbulk

The Supreme Court, in Oceanbulk Shipping & Trading SA v TMT Asia Ltd & ors [2010], has upheld yet another exception to the without prejudice rule holding that without prejudice negotiations, which form part of the factual matrix leading to a settlement agreement, will be admissible as evidence to assist in the interpretation of that settlement agreement. The reasoning of the court is impeccable but contradicts the long-established rule that without prejudice communications are not disclosable. This article considers the unintended consequences of the growing list of exceptions to the rule. It asks whether the logical conclusion is that lawyers about to commence without prejudice negotiations must begin by advising their clients of the circumstances in which those negotiations may be disclosable, and consider drafting an agreement to limit those circumstances where possible.

Additional Info

  • Case(s) Referenced:

    Farm Assist Ltd v DEFRA (No.2) [2009] EWHC 1102 TCC

    Oceanbulk Shipping & Trading SA v TMT Asia Ltd & ors [2010] UKSC 44

    Proforce Recruit Ltd v The Rugby Group Ltd [2006] EWCA Civ 69