The High Court decision in Jones and another v Lydon and others reminds us of the importance of providing a clear indication of when there is to be a shift from without prejudice (WP) communications to open communications, should a party wish to rely upon open communication at a later point. Failure to do so could result in WP protection being applied to communication that is not marked WP, a recipient’s non-response or silence.
WP communications are entered into by parties to encourage genuine attempts to settle disputes. The effect of applying WP to communications is that WP correspondence cannot be relied upon by the court as evidence of an admission. However, protection is not absolute and exceptions to the general rule apply, which allow the correspondence to be admissible in court as evidence.
Background
The dispute arose out of a Band Member Agreement (BMA) that had been entered into by the members of The Sex Pistols in 1998. The BMA included a provision which allowed the majority of the band members to bind the minority on decisions that related to the exploitation of the band’s music and other intellectual property rights.
In or around early 2021, most of the band members sought the consent from Mr Lydon (also known as Johnny Rotten) to allow the use of the band’s music in a television series based on a memoir published by Mr Jones back in 2016/17. Mr Lydon refused.
Proceedings were subsequently issued on 22 March 2021 against Mr Lydon for a declaration and injunctive relief to establish and enforce the provision under the BMA. Mr Lydon sought to rely upon the equitable doctrine of estoppel and the conduct of the band members in previous incidents, which purportedly showed that unambiguous agreement among the band members was required.
One of the incidents Mr Lydon sought to rely upon was a chain of emails dating back to 2014, which surrounded a dispute between the band members as to the division of monies received from a T-Mobile advert. The correspondence was marked as WP in the subject line of the emails, apart from the last email in the chain (unmarked email). It was argued that the last email was not protected by WP as it was unmarked and did not relate to the dispute of the division of monies from the advert. Furthermore, Mr Lydon sought to rely upon a non-response to an offer made in the unmarked email and a portion within the first email in the chain, which, while marked WP, he contended dealt with an entirely separate matter to that of the dispute and therefore was not covered by the protection.
The claimants, however, argued that the entirety of the correspondence, including the non-response, was protected and therefore could not be relied upon.
Decision
Sir Anthony Mann found in favour of the claimants, namely that they were entitled to invoke the majority voting rules against Mr Lydon under the BMA . Due to a speedy trial being ordered, the issue as to the estoppel arising out of the WP correspondence was dealt with during the trial but handed down in a separate judgment.
The key takeaway points from the judgment are as follows:
- Correspondence that is not marked WP, but follows on from WP correspondence, containing elements of the same dispute or subject matter, will continue to attract WP protection (paragraph 48, judgment). In instances where there is sufficient clarity that the contents of the correspondence deals with a different subject matter and there is a clear indication that the correspondence was intended to be open, WP protection will not apply. Removing “without prejudice” from the subject line of an email does not amount to sufficient clarity.
- Non-response or silence to an offer made in WP correspondence can also be treated as protected by WP (paragraph 51, judgment). The court considered whether the non-response fell under the estoppel exception to the general WP rule, namely whether the non-response amounted to an unambiguous and clear statement. In considering Berkley Square Holdings v Lancer Property Asset Management, the court held that the non-response did not amount to a clear and unambiguous statement and could not be relied upon.
- A dissection of WP correspondence would only occur in special cases where there is “particular clarity so there can be little doubt that a second and separate subject is being dealt with” (paragraph 23, judgment). It was held that the portion of the WP email that Mr Lydon sought to rely upon formed part of the overall dispute and was therefore protected.
Comment
The case is a helpful reminder to practitioners of the need to make clear the position of open communications that they may wish to later rely upon following any WP discussions.
