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Privileged Information and Settlement Agreements.

Legal Update by Emily Slocombe (Pupil).

(1) BGC Brokers LP (2) Martin Brokers Group (3) BGC Services (Holdings) LLP V (1) Tradition (Uk) Ltd (2) Anthony John Vowell (5) Michael Anderson [2019] EWCA CIV 1937. 

Do Defendants have a right to see unredacted settlement agreements which have privileged communications in them? The case of BGC Broker LP (above) addresses this. 

This case involved five Defendants. The case settled between the Claimant and the Third Defendant.   

The Third Defendant agreed to full and frank disclosure of the confidential information they had supplied to the Second Defendant. The communications agreeing this formed part of the settlement agreement by way of schedules. This benefited the Claimant as it generated a possible action for breach of the settlement agreement. 

Defendants One, Two and Five asked for disclosure of the settlement agreement including the schedules. The Claimant contended that they were only entitled to redacted copies.

The Claimant argued that the negotiations leading to the settlement were protected by without prejudice privilege and litigation privilege. 

The Claimant accepted that it was irrelevant that, save for one document, the documents were schedules and not part of the main body of the agreement. This was not a Tomlin Order after all. 

Therefore, the question was whether the relevant parts of the settlement agreement were protected by without prejudice privilege and/or litigation privilege. 

Arnold LJ in giving the leading, unanimous, judgment in the court of appeal said that one must bear in mind the purpose of the communication when considering without prejudice privilege. He commented that the purpose was not negotiation, but to conclude the dispute. Hence, the communications were not protected by without prejudice privilege. Lewison LJ added that in including the communications in the settlement agreement they were making the legal foundation of a potential claim, which is different from settlement talks. 

Litigation privilege. This only applies to communications made when conducting or contemplating litigation. That was not the purpose of these documents being included in the settlement agreement. 

The effect of this judgment is that nothing in a settlement agreement is protected by privilege, even if the information is ordinarily protected. 

Therefore, communications lose their privileged status by putting them in the settlement agreement. You have a decision to make: do you want the documents to remain privileged or do you want a possible cause of action?

 

Emily Slocombe (Pupil)

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