What does Without Prejudice mean really?
A party’s admission to something generally has the potential to be used against them in court. According to the without prejudice (WP) rule, claims made in a genuine attempt to settle a dispute cannot be used as evidence of admissions against the party who made them in court.
Without Prejudice Meaning
This regulation gives litigants the chance to speak freely without being concerned that the statements made could be used against them and put before the court as evidence if the matter does not settle, which encourages them to attempt to settle the dispute and resolve their problems outside of court. The Without prejudice rule only applies to negotiations that are sincere attempts to resolve the dispute between the parties, and there must be an ongoing conflict between them.
The most common way to make a without prejudice offer is through a letter or email to the other party, though it can also be done verbally.
Without prejudice, correspondence may be sent by any party at any time and need not be through counsel, but it is crucial to make it clear to the recipient that the communication is being sent without prejudice by clearly identifying it as such; otherwise, it will likely be viewed as “open” correspondence. The without-prejudice rule has several exceptions, so in those cases, the letter may be brought up in court. But under these exact conditions, the letter in question can only be accepted for that one use.
The exception to the without-prejudice rule
- The court will want to see the correspondence in question to determine whether or not the parties did agree to settlement terms when there is a disagreement over whether a without prejudice letter has resulted in a settled settlement agreement or not, for instance, if one party contests that a settlement was reached in the letters.
- If the court decides that the WP letter pertains to the issue of the reasonableness of the settlement, for example, where one party questions whether the settlement sum that is agreed upon is an appropriate one, this may also fall under an exception to the without prejudice rule where the letter is evidence of the reasonableness of a settlement.
- When a claim that was asserted in the letter without prejudice may have been subject to an estoppel. Estoppel states that a person cannot make an assertion that contradicts the meaning of a previous statement they have made. An unambiguous remark that gave rise to an estoppel made by one party during the course of talks might be acceptable.
- If the letter demonstrates that the agreement was reached as a result of deception, fraud, or undue influence, it may be considered proof of misrepresentation, fraud, or undue influence.
The same holds true if the letter without prejudice reveals any instances of fraud, extortion, or other wrongdoing. If the correspondence without prejudice is rejected as acceptable, it will serve as a cover for libel, blackmail, or other obvious improper behaviour. Unambiguous improper behaviour includes situations where a claimant admits that their claim is false but nonetheless pursues it, even if doing so essentially amounts to blackmailing the defendant.
Other instances include when a defendant expresses to a claimant that they will lie if the claimant pursues their claim and that they will leave the country if the claimant succeeds, or when a defendant unmistakably suggests that they would make specific assets judgment-proof if the claimant prevails.
To justify or excuse a delay, however this is extremely rare. For example, the court might allow the admission of letters written without prejudice to establish their actual receipt and the dates on which they were sent. In these circumstances, it’s possible that the letters’ contents aren’t truly read. It is crucial to keep in mind that if without prejudice correspondence is permitted in a preliminary stage of a case, it can automatically be made admissible at trial if the reason for its admission has to do with the case’s merits. This is due to the fact that it could theoretically imply that the privilege pertaining to the correspondence was waived.
When will communication be ‘without prejudice’?
It is crucial to stress that the phrase “without prejudice” does not automatically confer legal protection on all communications made in conjunction with it. It will only be relevant in cases where a written or verbal remark was made during talks in an actual effort to resolve the conflict in question. For instance, even if you see the term used in an email, it has no meaning if the communication itself has nothing to do with a legitimate dispute or negotiation (Unilever Plc v Proctor & Gamble Co )
Similar to the last example, simply because a statement has not been explicitly transmitted “without prejudice,” it does not necessarily follow that it will not be protected. Once more, the issue is whether the claim was made while really attempting to settle a current disagreement. However, it is preferable to err on the side of caution and explicitly state “without prejudice” in correspondence.
For instance, if your attorney begins an email chain with “without prejudice” but leaves it out later, all future conversations should still be protected as long as they are actually linked to the already-existing case. Even yet, if the line of communication is interrupted, remarks that appear to have been made on an open basis may no longer be protected by the “without prejudice” clause.
On rare occasions, the parties may specifically concur to engage in open negotiations, which means that conversations will not be shielded. In reality, this is extremely uncommon.
WP letter and a Without Prejudice Save as to Costs letter
A WP letter and a Without Prejudice Save as to Costs (WPSATC) letter are unique from one another. The aforementioned guidelines also apply to WPSATC letters, with the exception that they may be presented to the court for making decisions on costs. While a WP letter is marked as WPSATC, it implies that both parties have consented for the court to consult the correspondence when deciding on costs. Once more, it’s crucial to identify the correspondence as WPSATC.
Contact Our Dispute Resolution Team
You can get in touch with one of our Dispute Resolution Solicitors at Clarity Simplicity if you have any more queries or would like more information about without-prejudice letters.