HT-2022-000043 - [2025] EWHC 540 (TCC)

Given the Defendant’s approach, there can be no basis for any finding other than that the existence of ongoing without prejudice negotiations did not give rise to an agreement (express or implied) that the Intertek Audit Report would itself be “without prejudice”. This is not a case (as occurred in Rabin) where I am invited to discern an understanding arrived at during the without prejudice discussions, or in subsequent without prejudice correspondence, as to the status of the Intertek Audit Report.

There is certainly no evidence on which I could find (as asserted in the Defendant’s skeleton argument) that the Intertek Audit Report “was procured with the Claimants’ agreement that it would remain subject to the WP Rule”.

Mr Bowsher acknowledged that it is “hard to know” when the parties made their implied agreement, and he accepts that it is “not straightforward”. As developed in submissions, the Defendant’s case boils down to no more than that there came a time when the Claimants no longer sought to pursue their concerns in without prejudice correspondence about the scope of the audit and instead permitted it to take place by arranging for access to the Boson Facility. But I can see nothing in those facts which, even remotely, supports a tacit or implied understanding or agreement between the parties as to the status of the audit.

Mr Bowsher suggests that, by allowing Intertek to conduct the audit, the Claimants had “accepted the basis on which the audit would be done” in other words that it would be “subject to the without prejudice process agreed throughout”. But, to my mind there is a distinction between an agreement as to a without prejudice process and an agreement as to the status of an independent report; the latter cannot be inferred from the existence of the former. There is nothing in the documents (looked at objectively) to indicate that both parties agreed (or even understood) that the Intertek audit was to be conducted on the basis that the resulting report would be “without prejudice”. There is no evidence that the Defendant made a proposal to that effect which was subsequently “accepted” by the Claimants and, as Ms Hannaford rightly says, the privilege is joint and cannot be imposed by one party upon another.

That Mr Parsons was questioning the scope of the Intertek Audit Report and (on my reading of the without prejudice emails in Appendix A) arrived at a point where he accepted that the audit should go ahead on the Defendant’s terms (even if he did not agree with them) is nowhere near sufficient to cloak the report in without prejudice privilege. Those terms certainly never suggested that the report would be without prejudice.

Although Ms Snook’s subjective evidence is to the effect that it was the parties’ mutual understanding that the Intertek Audit Report “would be commissioned on a WP basis and remain subject to the WP rule at all times”, I did not understand Mr Bowsher to rely upon this evidence. He also did not repeat the submission in the Defendant’s skeleton argument as to the risk of unfairness in a situation where “the Claimants allowed [the Defendant] to commission an audit, knowing full well that [the Defendant] believed the results of such audit would be without prejudice”. This is of course disputed but takes matters no further. Neither parties’ subjective evidence is of any assistance to the court in seeking to determine, on an objective basis, whether or not there was an implied agreement to this effect.

I can see nothing whatever in the without prejudice correspondence between the parties, set out in detail in Appendix A, to support a finding that, as Mr Bowsher also said, “the parties made clear what the status of the report should be” and that was subsequently “crystallised” by their implied agreement upon Intertek entering the Boson Facility to conduct the audit. Certainly, there is nothing in that correspondence that evidences an intention on the part of both parties that their eventual agreement to the audit taking place at the Boson Facility on a particular date was also an agreement that it be conducted under the cloak of without prejudice privilege. In so far as the Defendant seeks to contend (after the hearing and in its proposed corrections to the draft judgment) that the without prejudice email of 28 January 2022 from Mr Parsons was “an express statement” by the Claimants that the audit report would be covered by without prejudice privilege, I reject that contention. Reading that email, I do not understand it to be referring to any agreement or understanding as to the status of the audit report itself.

Furthermore, and although not strictly necessary given my findings so far, looking at the unchallenged evidence (as to the existence of the Covid 19 pandemic; the urgent need for compliant Tests; the commissioning of the V-Trust and TUV Audit Reports on an open basis; the open discussions between the parties in late 2021 as to a further audit – which overlapped with the commencement of the without prejudice negotiations; the contents of the reactive lines documents and the internal discussions on the part of the Defendant about the need for, and purpose of, a further audit), there appears to me to be nothing in the factual context to suggest or support the existence of an implied agreement to the effect that the Intertek Audit Report would be without prejudice. Quite the contrary. If anything, and notwithstanding Ms Snook’s evidence that the Intertek Audit Report was not to be used as part of a public audit trail, that unchallenged evidence points strongly towards there being various purposes behind the commissioning of another audit report which do not sit comfortably alongside the Defendant’s contention as to its sole purpose, just as they do not support an implied agreement that it be without prejudice. The Defendant has chosen not to explain or challenge this evidence.

Finally, Mr Bowsher sought to rely upon correspondence between the parties after the Intertek audit (and in particular an email of 17 March 2022, referred to in Appendix A) which he suggested confirmed that the parties had both always intended the audit to be “without prejudice”. I disagree. I am not at all convinced that (applying a conventional approach to contractual construction) any document created after the audit is admissible for the purposes of determining objectively whether the Intertek Audit Report was commissioned on terms (express or implied) that it be without prejudice. Further, and in any event, I do not regard the email of 17 March 2022 sent by Mr Parsons as being in any way determinative: neither his reference to “a further BSCI type audit” nor his suggestion that another WP meeting take place to discuss the report (once provided) establish a joint understanding and agreement that the Intertek Audit Report should itself be without prejudice.