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The term ‘without prejudice’ can be confusing if you are unfamiliar with its legal implications. Usually, it is found in letters or documents, and at face value, it is not entirely clear what it might mean. ‘Without prejudice’ has a technical meaning within the law of evidence, and it is often used in legal negotiations. This article will outline what you need to know about the term. It will also explain how using evidence ‘without prejudice’ can help you during a legal settlement.
What Does the Term Mean?
Simply put, the term ‘without prejudice’ means that a party cannot use communication as evidence against the other party during a dispute. It is common when conveying information during a settlement negotiation in a dispute. This information can be in the form of written communication or oral communication.
When is it Used?
When a party uses ‘without prejudice’ in written communication, they usually clearly label it at the top of a letter. Generally, an open letter sets out the parties legal position. A ‘without prejudice’ letter usually follows an initial open letter, outlining a commercial settlement proposal.
When parties use the term in a spoken discussion, both parties must know what ‘without prejudice’ means for it to apply. Therefore, as a general rule, it is a good idea to consult a legal professional when engaging the rule during settlement discussions.
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How Can I Use the ‘Without Prejudice’ Rule?
As mentioned, engaging the ‘without prejudice’ rule allows you to attempt to reach a concluded settlement agreement without having to worry about whether the other party will use your communication against you.
However, simply using the words ‘without prejudice’ will not suffice to engage the rule. You must also:
- make a ‘genuine attempt’ to settle an existing dispute;
- not use any illegal or misleading comments during the negotiation; and
- not use any material that has already been disclosed without the rule.
Making a ‘genuine attempt’ is highly important to qualify for the ‘without prejudice’ rule. An disingenuous attempt, even with the words ‘without prejudice’, will not engage the rule. Similarly, if you do not use the words but you make a genuine attempt at settling the dispute, then a court might interpret your communication as nonetheless engaging the rule.
For example, you might combine the open letter and the ‘without prejudice’ letter into one document, with a heading clarifying the ‘without prejudice’ section. In this way, only a section of the document will be ‘without prejudice’. However, we recommend that you separate the this aspect of your correspondence from the open aspect. Doing so will minimise the risk of confusion or mistakes.
When Should I Not Use ‘Without Prejudice’?
The ‘without prejudice’ rule is appropriate for settlement discussions on an existing dispute. For this reason, it is not useful to use it in a communication that is unrelated to a dispute. For example, a communication in which you are trying to finalise the terms of a settlement agreement would be inappropriate for using the rule.
Why Can I Not Use ‘Without Prejudice’ Communication as Evidence?
The idea behind the ‘without prejudice’ rule is to encourage settlements instead of going to court. The English courts, for example, will usually encourage you to attempt a mediation process before bringing your case to court because it is usually more cost-efficient for you and more cost-efficient for the courts.
The ‘without prejudice’ rule falls under the law of ‘privilege’. The law of privilege concerns the type of evidence that is inadmissible in court. The law of privilege plays a part in facilitating settlement agreements and encouraging genuine attempts at coming to solutions in:
- negotiations;
- mediations; and
- plea discussions.
Key Takeaways
Adding the words ‘without prejudice’ to a communication can help you reach a faster settlement. This is because when used correctly, the words will assure both parties that they can negotiate frankly without worrying about future legal implications. You can use the rule in both written and oral communication, so long as both parties know of its legal meaning. For this reason, we recommend that you seek professional legal advice during the settlement process.
Finally, keep in mind that to engage the rule, you must make a genuine attempt at a settlement agreement. If your attempt is not genuine, the courts will not accept the communication as ‘privileged’ within the law of evidence.
If you need legal advice regarding ‘without prejudice’ communication, our experienced disputes lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
It means that a communication cannot be used as evidence by the other party in court. The term is often used during a settlement negotiation in a dispute and can be written communication or oral communication.
This term means that the ‘without prejudice’ protection only applies in court until the court hands down a judgment. ‘Save as to costs’ means that the court can use the communication in relation to deciding how to award legal costs.
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