The claimant had attended a meeting with his manager in September 2020 to discuss his possible retirement at the end of the year and the financial package that he might then receive.
During this discussion it was acknowledged that he had accrued a considerable amount of holiday entitlement that had not been paid. A payment of £68,199.60 was proposed as representing 168 days holiday in total.
The figures for holiday pay and other items were subsequently included in a draft settlement agreement that was produced some two months later. There followed negotiations about the figures but no agreement was reached.
The claimant was subsequently dismissed and he issued a claim for unlawful deductions in respect of the holiday pay. In the claim form, he recounted the meeting that had taken place and the fact the offer had been made to pay him more than £68k.
The employer objected to this information being in the evidence on the grounds that it was a without prejudice offer.
It was held that the evidence of the offer could be produced and relied upon in the proceedings as at the time of the discussion between parties there had been no dispute. The EAT considered that when the conversation took place litigation was not contemplated.
In this regard the fact the parties were making proposals to each other was relevant, but it did not conclusively establish that without prejudice privilege applied. Such proposals may be made in discussions, and yet the parties would not at the time have been contemplating litigation.
A dispute only arose once the settlement agreement had been produced and there was disagreement about the figures. Before that point the parties were not in dispute and the without prejudice rule relating to the evidence could not apply.
The decision highlights that evidence of a party making an offer in a meeting may be used against them if at the time it was made there was no litigation in prospect.