Feb 25

Without prejudice – what is it and how does it affect you?

Written by Sophia Bavin
Paralegal

E: sophia.bavin@raworths.co.uk

The ability to communicate ‘without prejudice’ is an invaluable tool when negotiating and trying to settle a dispute, and can potentially avoid the need to commence court proceedings or resolve ongoing proceedings.

The ‘without prejudice’ rule means that communications to your opponent in a dispute that are correctly labelled ‘without prejudice’, cannot be used to your disadvantage or evidence of your position in any court proceedings, provided they are genuine and valid ‘without prejudice’ communication. For without prejudice communications to be considered valid, it is important that the rule is applied correctly.

What does without prejudice mean?

The Civil Procedure Rules govern how civil claims are brought in England and Wales and encourage parties to take steps to resolve any dispute between them and to try to avoid the need for court intervention wherever possible.

One of the ways to encourage meaningful negotiation is to allow parties to have genuinely open discussions where they can explain their position and propose a way forward with a view to reaching an agreement.

However, for this type of discussion to be most effective, both parties need to be able to speak openly without the fear that what they say could be used against them in court proceedings if a settlement cannot be reached and prejudice their position in the proceedings.

‘Without prejudice’ is a term that is used by parties to a dispute when they want to be able to talk freely in order to resolve that dispute.  Anything that is correctly labelled as being without prejudice, cannot later be used by either party in court proceedings to prove admission or knowledge.

For example, if a retailer was defending a claim from one of its product suppliers and approaches the supplier to offer to pay 60 per cent of the claim on a without prejudice basis, the supplier cannot then use that early offer to pay as evidence that the retailer admits liability, or even 60 per cent liability.

When and how is without prejudice used?

Both written and oral communications can be without prejudice.

While the main reason for labelling communications ‘without prejudice’ it is to stop any admissions from being used in later court proceedings, for reasons of practicality, once it is agreed by the parties that they are writing or speaking ‘without prejudice’, all communication that falls under that banner cannot be used later.  Therefore, ordinarily any information that sits within an email or letter that is stated to be without prejudice, is generally excluded from being used in evidence.

An exception to this is where this without prejudice privilege has been ‘waived’ where, for example, the subject matter of communications marked without prejudice has clearly already been sent in open correspondence elsewhere, or the parties both agree that a without prejudice communication can be later referred to.

Although it is possible for communications that are not marked as such to be later found to have been made without prejudice from the wider circumstances, it is important to ensure that when you wish to speak or write without prejudice, that you clearly state this before starting a dialogue, or in any written communication to avoid any uncertainty as to your intention. Solicitors are used to starting phone calls with ‘can we speak without prejudice?’ when discussing a settlement.  Equally written communication may be headed as ‘without prejudice’.

What requirements are necessary for a communication to be without prejudice?

For a communication to be genuinely without prejudice, there needs to be an existing dispute between the parties, and the communication must be made in a serious and genuine attempt to find a resolution to that dispute.

If communication is made in a genuine attempt to settle a dispute without involving the court, then not only will any ‘admissions’ made in the course of such discussions be protected, but so are any statements made that are not in the party’s interests generally.

What does ‘without prejudice save as to costs’ mean?

Where a statement is made purely ‘without prejudice’, then it cannot be referred to at all in court proceedings.

However, if it is marked ‘without prejudice save as to costs’, it is possible to be brought to the attention of the court when the court is deciding who is to pay the costs following the court’s judgment in the claim.

The reason for this is to ensure that settlement negotiations are conducted reasonably.  If a reasonable offer is made to settle a case on a without Prejudice save as to costs basis, but is rejected and the court subsequently awards the same amount as had been offered previously, the court could then consider that the dispute should not have proceeded beyond that offer.

In these circumstances, the party that had made the offer would be allowed to show the court that it had earlier offered a sum that was then awarded, and ask the court to consider this when deciding which party should pay costs.

How we can help

Without prejudice negotiations can be an extremely useful tool in litigation and, when deployed effectively and tactically, can encourage parties to settle a dispute that would otherwise end up in court, saving them a lot of time, effort and money.

It is important, however that this tool it is used correctly, the without prejudice rule is complex and technical and can a have significant negative impact on your position if used incorrectly.  THe Dispute Resolution team at Raworths has many years of experience in this area. For further information and assistance, please contact Sophia Bavin in the dispute resolution team  at Raworths at email sophia.bavin@raworths.co.uk.

Raworths is based in Harrogate, North Yorkshire.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.  

Published on 13 February 2025