Garrod v Riverstone Management Ltd
Garrod v Riverstone Management Ltd
Garrod v Riverstone Management Ltd – the Employment Appeal Tribunal decided in this case that the “without prejudice” rule applied to an employee’s grievance which was found to evidence an existing dispute. We explore the reason for this decision and what the “without prejudice” rule means.
Ms Garrod had raised a grievance in which she made serious allegations against several senior managers about pregnancy and maternity discrimination issues. As a result, Ms Garrod was invited to a meeting with an external legal adviser acting for Riverstone Management Ltd. She was told the meeting was for a “preliminary discussion”. During the meeting the grievance was discussed and then an offer of £80,000 was made to Ms Garrod on a without prejudice basis to terminate her employment. However, Ms Garrod rejected this offer.
Following this, her grievance was not upheld, and Ms Garrod later resigned and brought a claim for pregnancy and maternity discrimination as well as constructive dismissal. Ms Garrod referred to the “without prejudice” discussion in her claim form and the company’s representative applied to have all references to the contents of the “without prejudice” discussion removed on the basis that it was protected from being disclosed as evidence.
What does the “without prejudice” rule mean and when does it apply?
The “without prejudice” rule means that if used properly communications (written and verbal) cannot be referred to in legal proceedings, which means they cannot be used as evidence.
The “without prejudice” rule only applies, however, when there is an existing dispute between the employer and employee and if the communication is a genuine attempt to settle that dispute. There does not need to be existing legal proceedings such as a tribunal claim, provided the employer and employee contemplated that litigation would ensue if they could not agree a settlement.
Employment Appeal Tribunal (“EAT”) Decision
The EAT upheld the Employment Tribunal’s decision that the conversation was covered by the “without prejudice” rule and could not therefore be referred to as evidence in the Tribunal proceedings.
The EAT were satisfied that: Ms Garrod’s grievance alleging pregnancy and maternity discrimination constituted an “existing dispute” because it set out what Ms Garrod’s legal claims would be; both Ms Garrod and the company had a reasonable contemplation that legal proceedings might ensue if they did not reach a settlement because Ms Garrod referred in her grievance to ‘using Acas mediation or the Early Conciliation process if the matter could not be resolved ‘in-house’’ and this was a clear indication of the possibility of legal proceedings; and on the facts the meeting was held in a genuine attempt to settle the matter.
What should businesses consider?
From time to time, an employer may wish to commence negotiations with an employee (or vice versa) to resolve a dispute. The rules around whether the ‘without prejudice’ rule applies to communications is a complex one and applies differently on a case to case basis. It is important to note that not all grievances will amount to an “existing dispute” allowing employers to rely on the “without prejudice” rule. Therefore, it will be necessary to consider the nature of the grievance and the manner and circumstances in how it is raised before delving into having a without prejudice conversation off the back of a grievance being raised or any other issue with an employee.
Businesses should also be reminded that, unlike HR consultants, information disclosed to solicitors for the purposes of gaining legal advice is confidential and protected from disclosure in court or tribunal proceedings by a concept known as “legal professional privilege”. Legal professional privilege is confined to legal advisers such as solicitors and counsel which means that employers can find themselves defending a claim from an employee where they are required to disclose the advice received from their HR consultants.