BGC Brokers LP v Tradition (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Arnold,Lord Justice David Richards |
| Judgment Date | 18 November 2019 |
| Neutral Citation | [2019] EWCA Civ 1937 |
| Date | 18 November 2019 |
| Docket Number | Case No: A2/2019/2554/QBENF |
| Court | Court of Appeal (Civil Division) |
[2019] EWCA Civ 1937
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE QUEEN'S BENCH DIVISION
MRS JUSTICE MOULDER
[2019] EWHC 2590 (QB)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Lewison
Lord Justice David Richards
and
Lord Justice Arnold
Case No: A2/2019/2554/QBENF
Max Mallin QC and Emily McKechnie (instructed by Bryan Cave Leighton Paisner LLP) for the Appellants
Sa'ad Hossain QC and Joyce Arnold (instructed by Mishcon de Reya LLP) for the Respondents
Hearing date: 31 October 2019
Approved Judgment
Introduction
This appeal concerns the applicability of the doctrines of without prejudice privilege and litigation privilege to an application for inspection of a settlement agreement between some, but not all, of the parties to proceedings. The Claimants (“BGC”) have entered into a settlement agreement with the Third Defendant, Simon Cuddihy (“the Settlement Agreement”). The First, Second and Fifth Defendants (“the Tradition Defendants”) seek inspection of an unredacted copy of the Settlement Agreement (inspection of a redacted version already having been provided). BGC resist inspection on the grounds of without prejudice privilege, alternatively litigation privilege. Master Davison rejected both claims to privilege and ordered inspection: [2019] EWHC 1569 (QB). Moulder J dismissed BGC's appeal: [2019] EWHC 2590 (QB). BGC appealed to this Court with permission granted by Males LJ. The hearing of the appeal was expedited since the trial of BGC's claim against the Tradition Defendants is listed for 20 November 2019. At the conclusion of the argument we announced that the appeal would be dismissed for reasons to follow. These are my reasons for concurring in that conclusion.
Factual background
BCG carry on business as inter-dealer brokers. The First Defendant (“Tradition”) is a competitor. Mr Cuddihy and the Fourth Defendant, Robert Goan, are brokers who worked for BGC at the relevant times. It is common ground that on a number of occasions in 2016 and 2017 Mr Cuddihy supplied confidential information (which he had obtained from Mr Goan) to the Second Defendant, Anthony Vowell, who was a broker at Tradition.
On 9 October 2017 Foskett J granted interim injunctions against Mr Cuddihy, Mr Goan, Tradition and Mr Vowell on a without notice application by BGC. The injunctions were served on the Defendants the next day, and BGC issued a claim form. On 12 and 18 October 2017 Mr Cuddihy attended interviews with BGC's solicitors (“BLP”). These interviews were conducted on an expressly “without prejudice and confidential” basis. On 16, 17 and 25 October 2017 Mr Cuddihy's solicitors (“CC”) sent emails to BLP, again on a “without prejudice and confidential” basis. On 1 November 2017 Mr Cuddihy made “short” and “long” affidavits pursuant to the order dated 9 October 2017. On 2 November 2017 BGC and Mr Cuddihy entered into the Settlement Agreement, which became effective on 9 November 2017. (There has also been a settlement between BGC and Mr Goan, but that is not material for present purposes.)
Relevant provisions of the Settlement Agreement
Clause 2.2 of the Settlement Agreement provides:
“Mr Cuddihy warrants and represents as per Clause 3 that he has provided full and frank disclosure of the supply of Confidential Information by him to Mr Vowell and/or Tradition and/or Related Parties as set out in (a) his two affidavits appended to this Agreement at Schedule 1 (short form) and Schedule 1A (long form) (the ‘Two Affidavits’) (for the avoidance of doubt, BGC agrees that Mr Cuddihy's obligations to provide separate affidavits as set out in Schedule D to the Order extending the interim injunction, filed at Court by consent on 27 October 2017 (the ‘Consent Order’) are discharged by this agreement and the Tomlin Order referenced at clause 2.6 below, (b) the interviews conducted on a ‘without prejudice’ basis on 12 October 2017 and 18 October 2017 (notes of which are at Schedule 4), (c) the emails sent on a ‘without prejudice’ basis on 16 October 2016 and 17 October 2017 (copies of which are at Schedule 5), (d) copies of the WhatsApp messages exhibited to the witness statement and/or (e) the information in respect of Mr Ruddell set out in an email from CC to BLP sent at 17:09 on 25 October 2017 (together, the ‘Disclosures’). For the avoidance of doubt, the Disclosures which are without prejudice (which does not include the Two Affidavits) will retain without prejudice privilege save that BGC and/or Mr Cuddihy will be able to waive the without prejudice privilege at its sole discretion in order to protect its position in the event that BGC considers or asserts that Mr Cuddihy has breached a term of this Agreement.”
By clause 3.1, Mr Cuddihy represented and warranted that:
“3.1.1 All of the information provided in the Disclosures contains a full and frank, to the best of his recollection, account of all Confidential Information supplied by Mr Cuddihy directly or indirectly to Mr Vowell, Tradition and/or its Related Parties … other than in the proper course of Mr Cuddihy's duties;
3.1.2 There is no additional information concerning the release of Confidential Information by other parties (other than in the proper course of their duties) of which he is aware;
3.1.3 Save as set out below, he will provide whatever assistance may be required by BGC in connection with BGC's prosecution of the Action, including in relation to providing additional witness statement or affidavits … and also willingly and cooperatively prepared for attend court if needed to provide evidence to the Court in the Action…”
By clause 3.2, Mr Cuddihy acknowledged that any breach of the foregoing representations and warranties would entitle BGC to take action against him for breach of the Settlement Agreement.
As indicated by clause 2.2, Schedule 4 of the Settlement Agreement contains copies of notes of the 12 and 18 October 2017 interviews and Schedule 5 contains copies of the emails dated 16 and 17 October 2017 (but not the email dated 25 October 2017). In the version of the Settlement Agreement provided by BGC for inspection by the Tradition Defendants, Schedules 4 and 5 were redacted.
The application for inspection
As counsel for the Tradition Defendants emphasised, the Tradition Defendants' application is for inspection of an unredacted copy of the Settlement Agreement. It is not for inspection of the notes of the meetings on 12 and 18 October 2017 or of the emails dated 16, 17 and 25 October 2017 (“the Antecedent Communications”). Accordingly, the question to be considered is not whether the Antecedent Communications are protected from inspection by without prejudice privilege and/or litigation privilege, but whether the relevant parts of the Settlement Agreement are protected from inspection by without prejudice privilege and/or litigation privilege.
As counsel for the Tradition Defendants acknowledged, however, there is a distinction between the notes of the meetings on 12 and 18 October 2017 and the emails dated 16 and 17 October 2017 on the one hand, which are reproduced in Schedules 4 and 5, and the email dated 25 October 2017 on the other hand, which is referred to in clause 2.2(e), but not reproduced in the Settlement Agreement. Counsel for the Tradition Defendants argued that clause 2.2(e) incorporated the text of the email dated 25 October 2017 into the Settlement Agreement by reference. I shall return to the merits of this argument below. At this stage the point to note is that, in reality, the Tradition Defendants' application is for inspection of both the Settlement Agreement and the email dated 25 October 2017. Consistently with this, the Master's order provided “[f]or the avoidance of doubt” that the email dated 25 October 2017 should also be produced for inspection.
Without prejudice privilege
Applicable principles
There is no dispute as to the relevant principles, which may be summarised as follows.
Written or oral communications which are made for the purpose of a genuine attempt to compromise a dispute between the parties may generally not be admitted in evidence. As Oliver LJ stated in Cutts v Head [1984] Ch 290 at 306, the policy behind this rule is that:
“… parties should be encouraged so far as possible to settle their disputes without resort to litigation and should not be discouraged by the knowledge that anything that is said in the course of such negotiations … may be used to their prejudice in the course of proceedings. They should … be encouraged fully and frankly to put their cards on the table … The public policy justification, in truth, essentially rests with the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of...
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