Dispute Resolution Update: 2016 Review

22 February 2017

The Irish Courts experience another busy year in 2016.

We review some on the key judgments concerning: 

Regulatory bodies referring to ‘without prejudice’ settlement discussions that may lead to waiving of litigation privilege

The potential cost implications of rejecting a “Calderbank” offer

Without prejudice and discovery

In March, the Court of Appeal considered in Purcell v Central Bank of Ireland the context in which ‘without prejudice’ documents can be disclosed as part of a discovery request.

The Central Bank served a Notice of Inquiry on Mr Purcell, a former director of Irish Nationwide Building Society ("INBS"). A week later, the Central Bank issued a statement confirming that it had reached a settlement with INBS under its administrative sanctions procedure.

Mr Purcell then commenced proceedings challenging the validity of the settlement as he argued that the administrative sanctions procedure was unconstitutional. He also asserted that his constitutional right to his good name was infringed by the publication of the settlement.

As part of his challenge, he sought discovery of ‘without prejudice’ correspondence which led to the settlement. The Court of Appeal, however, refused the discovery sought on the basis that it was subject to ‘without prejudice’ privilege. The Court also rejected that the Central Bank had waived its privilege by making a public statement regarding the settlement with INBS.

The Court of Appeal held that it would only order discovery of ‘without prejudice’ documentation if the Central Bank was considered to be acting in bad faith and as there was no evidence of impropriety in respect of the Central Bank’s actions. It refused to grant discovery.

In discovery, care should be taken when referring to the details of existing or concluded regulatory enforcement proceedings in the context of ongoing private litigation.

An offer you can't refuse?

In April 2016, the Court of Appeal confirmed its approach to Calderbank offers. In Shannon v O’Sullivan, it held that the defendants were entitled to the costs of the High Court appeals where the Court of Appeal had subsequently reduced the plaintiffs’ personal injuries awards contrary to the terms of the Calderbank offers made.

The plaintiffs were awarded damages by the High Court in their personal injuries actions. Directly after the High Court decision, however, the defendants wrote two Calderbank letters offering lower damages in the event of an appeal. The letters stated that if the offers of lower damages were not accepted by the plaintiffs, the defendants would seek their costs from the date of the letters. When the Court of Appeal subsequently reduced the plaintiffs’ quantum of damages to less than the Calderbank figure, the defendants sought their costs from the date of the offer. This was granted by the Court.

This Court of Appeal judgment will have serious implications for plaintiffs where a defendant makes a genuine offer of settlement by way of Calderbank letter where the defendant maintains that the level of damages awarded was excessive.

A Calderbank offer continues to be a useful method for a defendant to protect itself from being exposed to costs, particularly if the original court award was excessive to the plaintiff in the first instance. 

For more information, please contact a member of our Dispute Resolution team.

The content of this article is provided for information purposes only and does not constitute legal or other advice. 

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