The opening gambit: your communication strategy

When a dispute is on the horizon, the managers of a business need to decide whether to write to the other side on a without prejudice or open basis.

Without prejudice communications

A without prejudice communication is an oral or written communication entered into with the other side on a dispute in a genuine attempt to negotiate a settlement.

As a general rule, without prejudice communications cannot be referred to in court. Litigants are encouraged to settle disputes as a matter of public policy. The rule prevents litigants from being prejudiced by concessions made in an attempt to achieve a settlement.

Heading correspondence ‘without prejudice’ will not automatically prevent it from being disclosed in court. The court will go behind the heading when deciding whether the correspondence is admissible, to understand whether there was a genuine attempt to settle the dispute.

If a business heads correspondence ‘without prejudice’ where there is no genuine attempt to settle a dispute, the wrong message will be sent to the other side. An informed opponent will realise that the business does not know what it is doing, and there is a risk that a Judge will allow the correspondence to be read out in court.

Open correspondence

Open correspondence includes any letter, email or other communication which is not a genuine without prejudice communication. It is ‘open’ as it can be referred to openly in court.

Businesses often send a few open letters to opponents after disputes arise and before instructing solicitors in the hope that the letters will persuade the other side to concede a dispute. It is crucial to ensure that the content of those first few letters is carefully controlled for two reasons:

If the opponent does not want to concede the dispute, the opponent will send the correspondence to his solicitor for advice on the strength of his case. The solicitor assesses the case’s strength on the basis of the open correspondence. A carefully crafted open letter at the start of the case can lead the opponent’s solicitor to warn his client that he is likely to lose the case.

If the case does not settle and it goes to court, the trial judge will often carefully consider the first letters written by the business before solicitors were involved. Judges often assume that the real concerns are set out in the early correspondence passing between parties before they instruct lawyers.

The opening gambit

Business disputes should always be approached from a commercial point of view. The chance of obtaining a benefit, and the benefit’s value, needs to be weighed against the cost of trying to obtain that benefit.

The cost of instructing a lawyer to carefully read and check the first few letters before they are sent can often be money well spent. It could prevent a dispute from going to court (if the correspondence forces the opponent’s solicitor to advise his client that he has a weak case) or it could win the case (if it convinces the judge that the business was in the right).