Without Prejudice
Yes legally they cannot not, I would brush up on your UK law before making comment.
Why don't you call Jonathan Woodhouse from Wallace LLP and ask him about the pending law suit and maybe he can give you better understanding of the legal term "Without Prejudice"
direct quote from a law firm website
To be clear, however, just marking a letter "without prejudice" isn't going to automatically exclude the letter from use at trial. To be excluded, the letter must actually contain a settlement proposal; as our Court of Appeal said in a 1984 case called Belanger v. Gilbert, "not all letters so marked are to be held inadmissible." In another appeal case, Schetky v. Cochrane, from 1918, the court set out what was required to protect "without prejudice" letters:
"... the rule which excludes documents marked 'without prejudice' has no application unless some person is in dispute or negotiation with another, and terms are offered for the settlement of the dispute or negotiation...
"... before the privilege arises two conditions must exist, viz.: (a) a dispute or negotiation between two or more parties; and (b) in which terms are offered"