'Without prejudice': What you need to know

When I was first in practice, I came upon the unusual phrase ‘without prejudice’. It sounded very legal and technical. 20 years later I’m still surprised by the incorrect use of the term – mainly by lawyers!

By Anis Waiz, head of commercial litigation at Curtis Law Solicitors.

Many people wrongly believe that if you add the magic phrase to any correspondence it cannot be shown to the judge no matter what has been said. More worryingly, many lawyers appear to think along the same lines too.

As Lord Griffith in Rush & Tompkins v GLC [1989] said: “A competent solicitor will always head any negotiating correspondence ’without prejudice’ to make clear beyond doubt that in the event of the negotiations being unsuccessful, they are not to be referred to at the subsequent trial.”

So what does ‘without prejudice’ really mean? The ‘without prejudice’ rule protects genuine negotiations with a view to settlement from being disclosed. In simple terms, you need a dispute and a genuine attempt to settle it. The rule is designed to encourage parties to settle their differences rather than use proceedings.

Take this simple example: You are in a dispute with a party to whom you’ve supplied goods worth £1,000. To avoid proceedings you write to them offering to accept £500. This would be a without prejudice offer.

Using the same example, if the other party writes to you requesting information about your claim in order to consider the offer, that correspondence is not ‘without prejudice’, and could be produced to the court at a later stage (as long as there is no mention of the offer).

A ‘without prejudice’ offer may not be shown (with exceptions) to the court, unless the issue is whether or not negotiations have resulted in an agreed settlement.

But what happens if someone slips up and fails to state the simple words ‘without prejudice’? Can the offer be shown to court? The simple answer is no. If it is a genuine ‘without prejudice’ offer which falls within the rule, it does not matter whether the words ‘without prejudice’ are used. The key is it contents, not the description – or lack of it. So before you add ‘without prejudice’ to every letter; stop, read and think. Is there a real dispute and a genuine attempt to settle it?