Why is using ‘without prejudice’ in a dispute not without legal risk?

The phrase without prejudice is often used during a civil dispute to protect discussions from being later relied upon in court.

Many people use this phrase without really understanding what it means and where the limits of its legal protection lie.

A common misconception is that any correspondence labelled as without prejudice is shielded from being referred to in court, though this is not entirely true.

It is important to understand how the purpose of communications and the contents of a discussion can alter whether without prejudice applies.

What does ‘without prejudice’ mean?

Without prejudice is a legal term that can protect statements, offers or discussions made during settlement negotiations from being disclosed or relied upon in court.

The legal protection it provides encourages parties to speak and negotiate disputes freely without fear that statements will be later used against them.

For discussions with the label without prejudice to be protected from disclosure, they must be made in an attempt to reach a mutually accepted agreement.

This means settlement discussions, negotiations and proposals can all be protected by this legal rule, if a communication is truly intended as without prejudice.

However, there are some important caveats that need to be understood.

How can without prejudice be misused?

If the courts decide the label has been misused and doesn’t meet the necessary criteria, they can disclose the communication as evidence.

Although without prejudice can effectively protect written or oral statements in a civil dispute, it is subject to several exceptions.

Some common examples of misuse include:

• Labelling routine correspondence – Marking standard communications or updates as without prejudice provides no legal protection, as they are separate to settlement negotiations.
• Using it outside a dispute – Aiming to apply the label without there being a dispute means no protection can exist.
• Concealing admissions of liability – Where a party has admitted guilt or responsibility in correspondence, without prejudice might not apply. However, this depends on the context and whether the communication forms part of a dispute settlement.
• Misconduct in evidence – If there is evidence of improper conduct, such as fraud, perjury or blackmail, communications are not eligible for legal protection.

We encourage you to seek legal advice before employing without prejudice in correspondence, ensuring the term is providing the legal protection intended.

How can ‘without prejudice’ be used correctly?

If you are planning to use without prejudice in dispute negotiations, it is important to clearly state your intent in communications.

At the beginning of any letters, emails, written statements or verbal discussions, you should explicitly declare without prejudice to ensure all parties understand its confidentiality.

It’s best practice to reaffirm the status of settlement discussions periodically, while clearly indicating if discussions have shifted back to an ‘open’ status.

It is helpful for all parties to agree that negotiations are conducted on a without prejudice basis, especially where discussions are verbal or informal.

While discussions may not be intended for use in litigation, it’s good practice to keep a detailed record of all without prejudice communications.

This avoids any future confusion between parties and later disputes over whether correspondence was legally protected.

Speak to our solicitors

Legal guidance can offer a lot of benefits for parties involved in a civil dispute, particularly where negotiations want to be kept productive.

Our specialists can review existing paper trails and advise on what is and isn’t protected under the without prejudice rule, assessing your legal position and potential risks of disclosure.

We can establish separate correspondence pathways, which can differentiate open and without prejudice communications to avoid contaminating settlement negotiations.

If a party has misused without prejudice, we can advise clients on which evidence they are able to refer to if a dispute were to escalate.

Want to protect negotiations from disclosure in legal proceedings? For advice on getting without prejudice correct, speak to one of our civil litigation solicitors.