England recognises new exception to without prejudice privilege

Herbert Smith’s e-bulletin commences:

‘Supreme Court confirms new exception to the ‘without prejudice’ rule

In its judgment handed down on 27 October 2010 in Oceanbulk Trading & Shipping SA v TMT Asia [2010] UKSC 44, the Supreme Court added a new exception to the ‘without prejudice’ rule. It held that facts communicated between parties in the course of ‘without prejudice’ negotiations should be admissible, if they would otherwise be admissible as part of the ‘factual matrix’ to aid contractual construction.’

The contract the construction of which was contemplated was a settlement agreement. The Supreme Court is now the foremost Court in England, following the demise of the House of Lords.

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