Introduction

Woodward v. Santander UK Plc ([2010] IRLR 834) is a significant judgment delivered by the United Kingdom Employment Appeal Tribunal on May 25, 2010. The case revolves around Mrs. Diana Woodward ("the Claimant") who appealed against the dismissal of her claims by the Employment Tribunal. Mrs. Woodward alleged unfair dismissal and direct sex discrimination, asserting that her former employer, Santander UK Plc (formerly Abbey National plc), had discriminated against her in subsequent employment endeavors following her dismissal in 1994.

The core issues in this case pertain to the admissibility of evidence obtained during "without prejudice" negotiations and the procedural requirements for amending claims to include an actual comparator in discrimination allegations. The Judgment explores the stringent application of the "without prejudice" rule and the necessity for precise procedural compliance when amending claims in employment discrimination contexts.

Summary of the Judgment

Mrs. Woodward was employed by Santander UK Plc from 1991 until her dismissal in November 1994. She initiated proceedings alleging unfair dismissal and direct sex discrimination, which were settled in November 1996 without an admission of liability. The settlement did not mandate the provision of a reference by her former employers.

In subsequent years, Mrs. Woodward struggled to secure alternative employment and contended that Santander UK had either directly or indirectly hindered her employment applications through poor references or lack of response to reference requests. She brought these claims before the Employment Tribunal, which ultimately dismissed all her allegations after a 12-day hearing.

Dissatisfied with the outcome, Mrs. Woodward appealed on two primary grounds:

• The exclusion of evidence regarding a purported refusal to provide a reference during "without prejudice" settlement negotiations.
• The Tribunal's refusal to permit her to amend her claim to include an actual comparator, Mr. Gary Brown, in her direct sex discrimination allegation.

The Employment Appeal Tribunal upheld the Tribunal's decisions, affirming the strict application of the "without prejudice" rule and the procedural necessity for timely amendments to claims.

Analysis

Precedents Cited

The Judgment extensively references several pivotal cases that have shaped the application of the "without prejudice" rule and the principles governing amendments to claims:

• BNP Paribas v Mezzotero [2004] IRLR 508 – This case clarified the boundaries of the "without prejudice" rule, particularly in discrimination claims, establishing that the rule applies unless clear impropriety is evident.
• Rush & Tomkins v GLC [1989] AC 1299 – A foundational case outlining the "without prejudice" rule's intent to encourage settlement negotiations free from fear of prejudicial evidence in court.
• Unilever plc v Proctor & Gamble Company [2000] 1 WLR 2436 – Discussed the narrow exceptions to the "without prejudice" rule, emphasizing that only the clearest instances of abuse qualify.
• Savings & Investment Bank Ltd v Fincken [2004] 1 WLR 667 – Reinforced the limited scope of exceptions to the "without prejudice" rule.
• Ofolue v Bossert [2009] 2 WLR 749 – Highlighted that any expansion of exceptions to the "without prejudice" rule must align with its foundational public policy objectives.
• Selkent Bus Co v Moore [1996] IRLR 661 – Provided general principles for amending claims, particularly balancing the hardship of granting or refusing amendments.

Legal Reasoning

The Tribunal's legal reasoning was meticulously grounded in existing jurisprudence concerning the "without prejudice" rule and the procedural aspects of amending claims:

• 'Without Prejudice' Rule: The Tribunal upheld that communications labeled "without prejudice" during settlement negotiations are generally inadmissible in subsequent litigation. This rule is rooted in the public policy objective of fostering open and honest settlement discussions without fear that such communications could be used adversely in court.
• Exception for Unambiguous Impropriety: The Tribunal acknowledged the narrow exception allowing the admission of "without prejudice" communications if their exclusion would facilitate perjury, blackmail, or other clear impropriety. However, it held that the evidence Mrs. Woodward sought to introduce did not meet this high threshold.
• Amending Claims to Include an Actual Comparator: Regarding the procedural aspect, the Tribunal emphasized the necessity for claimants to present complete and detailed claims from the outset. The late attempt to introduce an actual comparator was deemed procedurally improper, as it did not provide the Respondents with adequate notice to prepare a defense.

Impact

The Judgment reinforces the stringent application of the "without prejudice" rule, particularly in the sensitive context of discrimination claims. It underscores that exceptions to this rule are not to be broadly interpreted, thereby safeguarding the integrity of settlement negotiations. Additionally, it highlights the critical importance of procedural compliance when amending claims, ensuring that all parties are adequately informed and prepared to address new allegations or evidence.

Going forward, employment tribunals and appellate courts are likely to reference this Judgment when deliberating on similar issues pertaining to evidence admissibility and procedural amendments in discrimination cases. It serves as a precedent that both protects the sanctity of settlement discussions and enforces procedural rigor in claim formulation.

Complex Concepts Simplified

'Without Prejudice' Rule

The "'without prejudice' rule" is a legal principle that ensures any discussions or communications made during settlement negotiations cannot be used as evidence in court if the negotiations fail. The primary purpose is to encourage open and honest dialogue between disputing parties without the fear that their concessions or admissions might later be used against them in litigation.

Unambiguous Impropriety Exception

While the "'without prejudice' rule" generally keeps settlement communications confidential, there is a narrow exception known as "unambiguous impropriety." This exception allows the introduction of such communications into evidence only if their exclusion would enable egregious misconduct (like fraud or blackmail) to go unchecked. Importantly, this exception is applied sparingly and only in the most clear-cut cases of wrongdoing.

Amending Claims

In legal proceedings, especially in employment disputes, claimants may need to modify or add new allegations as the case progresses. This process is known as "amending claims." However, tribunals require that such amendments be made in a timely manner and with sufficient notice to the opposing party to ensure fairness. Late amendments, particularly those introduced at the end of hearings, are generally denied to prevent unfair disadvantage to the Respondent.

Actual Comparator vs. Hypothetical Comparator

In discrimination cases, a "comparator" is a person against whom the claimant's treatment is compared to establish discrimination. An "actual comparator" refers to a real individual who has experienced differing treatment under similar circumstances, whereas a "hypothetical comparator" is an imagined or theoretical person used for comparison purposes. The use of an actual comparator can provide concrete evidence of discriminatory practices but must be appropriately introduced into the case.

Conclusion

The Woodward v. Santander UK Plc Judgment serves as a pivotal reference in the realm of employment discrimination law, particularly concerning the admissibility of evidence from settlement negotiations and the procedural requisites for amending claims. By upholding the strict application of the "'without prejudice' rule" and emphasizing the necessity for timely and detailed claim formulations, the Judgment reinforces the principles of fairness and integrity in employment tribunals.

For legal practitioners and parties involved in employment disputes, this case underscores the importance of meticulous case preparation and adherence to procedural protocols. It also delineates the narrow scope of exceptions to the "without prejudice" rule, ensuring that settlement negotiations remain a secure avenue for dispute resolution without unwarranted judicial interference.

Overall, this Judgment contributes to the broader legal discourse by balancing the protection of settlement communications with the imperative of procedural justice, thereby shaping the conduct of future employment discrimination cases.