What is ‘Without Prejudice’?

The term ‘without prejudice’ is often used and frequently misapplied.

In the context of litigation, ‘without prejudice’ communications are inadmissible (meaning they cannot be provided to a court) so long as they contain a genuine attempt to settle a dispute. This protection encourages parties to make concessions and compromises to resolve their dispute without concern that their offer or communication will be relied upon by an opposing party in court.

Importantly, "without prejudice" only applies where a dispute has arisen and either party is making a genuine attempt to settle the dispute.

 

‘Without prejudice’ protections do not apply to:

•    general commercial negotiations;
•    communications where there is no offer or genuine attempt to settle a dispute;
•    communications containing impropriety or misconduct;
•    non-confidential communications;
•    material already disclosed in open correspondence with the parties’ consent.

 

What is ‘without prejudice save as to costs’?

When a communication is ‘without prejudice save as to costs’, the same protections apply until the question of costs arises following the determination of proceedings by the court. At this time, the court may consider without prejudice communications for the limited purpose of formulating an order for the payment of costs, especially if a reasonable settlement offer was refused.

 

Using ‘without prejudice’ or ‘without prejudice save as to costs’

To ensure your dispute negotiations are protected, ‘without prejudice’ or ‘without prejudice save as to costs’ must be expressly stated on written correspondence. Formal negotiations such as mediations are recognised as being without prejudice. However, the term should be clearly stated at the start of oral communication outside a formal negotiation setting.

 

For all questions regarding dispute resolution and litigation, please do not hesitate to contact our litigation and dispute resolution team.