As a personal injury lawyer in Vancouver since 1995 I have made many without prejudice offers to settle car accident injury claims as well as other personal injury claims. Off the record settlement offers usually have a blanket protection which applies whether or not settlement negotiations succeed. Therefore, these offers cannot usually be used as evidence at a trial.
This defamation case however allowed the letter offering settlement to go in as evidence(Monument Mining Limited v. Balendran Chong & Bodi, 2012 BCSC 389). The Court found that the letter contained threats of an egregious nature. The letter warns that if the settlement proposal is not accepted, the clients may bring claims “…alleging fraud and other misdeeds and may inform the AIM, the TSX and Haywood Securities Inc. of the alleged fraudulent conduct. Such actions could be devastating for a publicly traded company.”
In allowing the settlement offer in as evidence the judge pointed out that,
[21] The authorities have long recognized that litigation privilege does not attach to egregious threats.
[22] In Greenwood v. Fitts(1961), 29 D.L.R. (2d) 260 (B.C.C.A.), Tysoe J.A. noted at 269:
There is no doubt in my mind that the fact that the discussions were “without prejudice” discussions, does not rule out evidence of threats of the nature alleged. The rule of privilege for “without prejudice” settlement discussions was never intended to give protection to this sort of thing.
[23] In Unilever Plc v. Proctor & Gamble Co., [2000] 1 W.L.R. 2436 (C.A.) at 2444, Walker L.J. noted that a “party may be allowed to give evidence of what the other said or wrote in without prejudice negotiations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other ‘unambiguous impropriety’”.
[24] In Augier v. O’Reilly 2011 ONSC 4583 at para. 15, Ramsay J. said:
[15] On grounds of public policy, letters written without prejudice and written bona fide to induce the settlement of litigation are not to be used against the party sending them. But, when the letter embodies threats if the offer be not accepted, it is in the interests of justice that such tactics should be exposed, and no privilege protects: Underwood v. Cox, [1912] O.J. No. 131 (Div. Ct). Not any threat is sufficient. For the communication to be exempt from settlement privilege, the threat must be of such a character that the public interest in its disclosure outweighs the public interest in protecting settlement communications: Bryant, Lederman and Fuerst, The Law of Evidence in Canada (3d ed.) s. 14.338.
[25] In Evergreen Building Ltd. v. IBI Leaseholds Ltd., 2006 BCSC 1190 at para. 16, 58 B.C.L.R. (4th) 294, Kelleher J. said at para. 16:
[16] Privilege is lost not by making a threat, but by threatening to do something of an egregious nature. For example, a threat to commence an action or to bring a motion does not destroy the privilege attaching to a settlement communication. On the other hand, a threat to commit perjury is not privileged.