4min chapter

11KBW Employment Podcast cover image

Swiss Re: Threats, Offers and the WP Rule

11KBW Employment Podcast

CHAPTER

Leveraging Misconduct for More Money and Tips on Drafting Without Prejudice Letters

Learn about a case where one party uses the discovery of misconduct to gain more money, and get tips on drafting without prejudice letters containing serious allegations.

00:00
Speaker 2
So it was just, I found out you've done this naughty thing, so give me a million pounds. I mean, it wasn't
Speaker 1
a million pounds, but yeah, well, we have discovered that you have done something really naughty. And unless you give us this increased amount of money, that has nothing to do with how your behavior is constituted the value of the shares or has improved our position in the litigation, we are just using your naughtiness as a way of squeezing out of you an increased amount of money that has nothing to do with the effect of your behavior on the litigation. So one of the things the Court of Appeals says in first-or-in first-er is that it would have been perfectly legitimate for the shareholders to say to the third shareholder, we have discovered this behavior about you, that you have these undisclosed bank accounts. And the effects of that is that it affects the merits of our position or it increases the value of the shareholding by this amount. And therefore, because of that, we're going to increase the amount we're asking for the shares. So we've discovered this behavior that has an effect on the value of the shareholding, and that means that we can increase the offer. That would have been a perfectly appropriate thing for them to have done, but that isn't the offer that the Court of Appeals says that they made. What they did was they said, we've discovered this about you, and unless you increase or accept a substantially increased value, then we're going to use our ability to control the company to come after you for criminal proceedings and for contempt.
Speaker 2
So finally, what tips do you have for employers who are trying to draft without prejudice letter containing potentially serious allegations without crossing the line?
Speaker 1
So I think one of the things that benefited the employer in this case was the fact that it was writing these letters at a formative stage of its investigation. The advantage that gave Swiss Reion in this case was able to present in its without prejudice letter these issues merely as concerns. So we've discovered that you've done X, Y and Z. We're now going to investigate that, and we're not prejudging what we're going to find. Because these allegations, these concerns that we've got if proved are very, very serious, much more difficult, I think, to try and package raising those early concerns while saying that we're not prejudging. Much more difficult, I think, for an employee to suggest that that is unambiguously improper to do. And indeed, it's precisely what an employer should be doing in circumstances of giving an employee a forewarning. But secondly, there is a tactical question, I think, in these sorts of issues, whether it's if you're going to make the approach to the side, whether it should be writing, whether it should be done orally. And I'm strongly of the view that setting it out in a carefully drafted letter, which has all the nuance that you're able to put into a carefully drafted letter is definitely the way forward. Although, of course, there's a downside, of course, if it is written, that it will be absolutely clear to the tribunal or to the court what was said and what is alleged to be unambiguously improper. But despite that, I think written communications with these serious allegations is always the way.
Speaker 2
Ultimately, this case should provide some comfort to employers and ministers that if they are making ordinary allegations, if they are saying things you would expect to see in without prejudice correspondence, whether that's laying out apparent misconduct, whether that's making costs warnings, that is not going to cross the line.
Speaker 1
That's a fair conclusion, which would be this raising serious allegations, raising potentially criminal conduct, is always going to be starting from a position where you need to be very, very careful. But to put it the other way around, I think it would have sent some shockwaves across the city of London. If this, what I view, has been a perfectly normal, without prejudice letter, had been found not only by the employment tribunal, but also by the EAT to have constituted an ambiguous impropriety simply because the employer at a formative stage was raising legitimate and perfectly unarguable concerns about admitted behaviour of the employee.
Speaker 2
That was Andrew Edge talking to me about Swiss Re. You can subscribe to the 11 KBW Employment Podcast on all the usual podcast apps and you can email us at employmentpodcast at 11KBW.com.

Get the Snipd
podcast app

Unlock the knowledge in podcasts with the podcast player of the future.
App store bannerPlay store banner

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode

Save any
moment

Hear something you like? Tap your headphones to save it with AI-generated key takeaways

Save any
moment

Hear something you like? Tap your headphones to save it with AI-generated key takeaways

Share
& Export

Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more

Share
& Export

Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode