The Claimant was dismissed for redundancy having already brought various claims including race, sex and pregnancy/maternity discrimination. Before then, she had raised grievances with the Respondent by email and copied the emails to her personal email address and to that of her husband. One of the emails included information about a transaction with a client of the company which was a breach of her employment contract and not in line with the employer's code of conduct. However, an investigator found there were strong mitigating factors, in that the sole purpose was to support the grievances she had raised with no indication that anyone had suffered adverse consequences. He recommended informal action. On the same day the Claimant brought her first claims, the Respondent's solicitor sent her a 'without prejudice' letter (the WP letter) making a number of allegations against her and suggested that these could result in summary dismissal, criminal convictions, fines and/or findings of a breach of the Conduct Rules of the Financial Conduct Authority which could make it difficult for her to work again in the regulated sector. It ended by offering a settlement agreement in which she would be paid £37,000 and her employment would be terminated. The Claimant sought to be able to use this letter in the full merits hearing which the ET agreed to, saying that the WP letter was admissible on the basis that it constituted 'unambiguous impropriety'. The Respondent appealed.

The EAT allowed the appeal. The WP letter was inadmissible in evidence at the final hearing by application of the 'without prejudice' rule. The protection was not displaced by the letter containing exaggerated allegations by the employer that the employee had committed serious misconduct with potential criminal and/or regulatory consequences. Where there was an arguable basis for the allegations, an EJ at a preliminary hearing without oral evidence was not in a position to rule that the letter amounted to 'unambiguous impropriety'.