At least a “hint of potential compromise or negotiation” must be in the communication for privilege to attach.
Adding the words “without prejudice” does not create privilege, and their absence does not mean it is not there. (Paragraph 25.)
The court noted that the privilege belongs to both parties and cannot be unilaterally waived.
Dealing with the claim that the limitations period was suspended during settlement negotiations, the court said “privilege should not normally give way to answer a limitations defence.” (Parties should enter a tolling agreement.)
In the result, parties continue to be free to put all their cards on the table during settlement discussions, including in mediation.