In breach of implied contract and trademark infringement litigation, English Court of Appeal rejects defendant's claim that trial court erred in refusing to bar admission of twenty years of interparty correspondence in courts of Taiwan and New Zealand under "without prejudice" rule
In March 1974, senior executives from Prudential Assurance Co, Ltd. (Prudential UK) and Prudential Insurance Co. of America (Prudential USA) met in London and agreed on the use of the name "Prudential" in relation to the business of insurance in various territories. For example, Prudential UK would not use the "Prudential" name or mark in the United States and Prudential USA would not use that name or mark in Europe or in certain countries of the Commonwealth. By pursuing a policy of discussing and resolving problems as they turned up, the two companies coexisted without undue conflict until the mid-1990s.
Prudential UK filed an action in England against Prudential USA for acting in breach of the legally binding agreement, and for infringing trademarks to which Prudential UK was allegedly entitled in the UK and Europe. Plaintiff also filed similar proceedings in Taiwan and New Zealand.
In response, defendant applied for orders that, in the Taiwan and New Zealand proceedings, plaintiff withdraw from evidence all the relevant inter-party correspondence between 1974 and 1995. It sought a declaration that the "without prejudice" rule protected all or similar evidence from use in any contentious proceedings, domestic or foreign.
The trial judge, however, found that the evidence to which defendant objected was not subject to the privilege rule. Defendant appealed that decision, claiming that the application of the "without prejudice" doctrine in this case rested on an implied contract. The English Court of Appeal (Civil Division), however, dismisses the appeal.
Before resolving the applicability of the "without prejudice" rule, the Court points to the difficulties involved in enforcing a rule of this type in foreign proceedings. "In my view the position is different in those cases in which the only justification for restraining the use of "without prejudice' material is public policy. ...."
"In those cases there is no contractual basis upon which to order an extra-territorial restraint. The question in those cases is whether the English court, by ordering a person not to make use of "without prejudice' material in foreign proceedings, should seek to impose on the conduct of the foreign proceedings a restraint which is justified only by its own perception of what public policy requires. In my view, it is plain that that question must receive the answer "No'."
"In that context it is important to keep in mind that the rule in England -- in so far as it is based on public policy -- has evolved in response to the need to balance two different public interests, "namely the public interest in promoting settlements and the public interest in full discovery between parties to litigation' [Cite]. The latter interest is a reflection of the principle that trials should be conducted on the basis of a full understanding, by both parties and the court, of the facts relevant to the issues in dispute."
"The "without prejudice' rule has to be seen as encroaching upon that principle. The justification for such encroachment, in the eyes of the English courts, has been the greater public interest in promoting settlements. But it would be insular not to recognise that courts in other jurisdictions might think -- or might be required by legislation to accept -- that a different balance should be struck; and arrogant to seek to impose on the conduct of litigation in other jurisdictions a rule which is based on our own perception of where the greater public interest lies." [¶ 23]
In rejecting defendant's privilege claim, the Court agrees with the trial judge's placing of decisive importance on the failure of the documents to bear the customary "without prejudice" notation.
"I find it impossible to say that, when the chairman and chief executive officer of Prudential USA and the chief general manager of Prudential UK met in early March 1974 to exchange views "on a wide range of subjects' and "with a view to removing the prospect of any future disputation between us' as to "the areas in which each of our companies would be free to use the name Prudential', they must be taken to have done so on the basis that neither company would be entitled to refer to those discussions in any litigation anywhere in the world at any time in the future."
"Had that been their intention I would have expected them to say so -- at the meeting and in the careful and detailed letters which they wrote immediately following that meeting and in the subsequent months. Further, I would have expected the in-house lawyers to say so, at the earliest opportunity. And, if that was not the basis upon which discussions took place in early March 1974, I find it impossible to identify some subsequent point at which the position changed." [¶ 26]
Citation: Prudential Assurance Co. Ltd. v. Prudential Insurance Co. of America, Court Of Appeal (Civil Division),[2003] E.W.C.A. Civ. 1154, [2003] All E.R. (D) 546 (July 31), (Approved Judgment).
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