Received a “Without Prejudice” Letter? Here’s What It Means
If you have received a “without prejudice” letter, there’s a good chance it was written by a lawyer. This means that you should probably get a lawyer yourself at this point, or risk being at a serious disadvantage.
What is the Without Prejudice Rule and What Does It Mean?
A without prejudice letter is a communication between the parties, made for the purpose of settling a dispute.
The letter may, for example, include a proposal from Party B for Party A to come to a compromise on its claim for a certain sum of money.
“Without prejudice” simply means that, if you go to court later regarding the dispute referred to in the letter, you can’t produce the letter in court to use it against the writer.
What Does “Without Prejudice Save as to Costs” Mean?
One common variation of this is “Without Prejudice Save As To Costs”. This means that you can’t produce the letter in court until the end of the case when the court has already decided the outcome.
Then the letter can be produced, purely for the purpose of establishing how the parties’ legal costs should be apportioned between them.
For example, the writer of the letter might offer a certain amount of money to settle the dispute and you might reject the offer. The court might then award you an amount that was less than the offer.
In this case, the writer of the letter could produce the letter at that stage to argue that you should pay all their legal costs.
This would be on the basis that they had previously made an offer to you to settle the dispute at an amount the court obviously finds generous, and all the legal costs they have spent from that point onwards have ultimately been unnecessary to arrive at this outcome.
Why Does the Without Prejudice Rule Exist?
The purpose of the without prejudice rule is to allow parties to negotiate privately in good faith to resolve disputes without resorting to the courts.
That is, without fear that any admissions they might make in their correspondence in order to reach a compromise might later be used against them, should the dispute be litigated.
Hence, such communications (i.e. without prejudice letters) cannot be used as evidence in court.
When Does the Without Prejudice Rule Apply?
You generally cannot produce a letter in court if it meets the following 2 requirements:
- The letter addresses an actual dispute which exists between the writer of the letter and the recipient; and
- The letter attempts to negotiate a resolution or settlement of that dispute.
Note that the words “Without Prejudice” don’t actually need to appear on the letter for a court to find that these 2 conditions have been met, and that the letter is actually without prejudice and inadmissible.
Conversely, even if the words “Without Prejudice” are on the letter, if it doesn’t meet these 2 conditions, it is not truly without prejudice, and an argument that it should be admissible in court can be made.
While this is perhaps unhelpful from a practical perspective, the takeaway is – handle any letters marked “without prejudice” (or any letters at all which try to negotiate a resolution of a dispute) with care. Meaning, do not try to use them in court without taking legal advice.
Are There Any Exceptions to the Without Prejudice Rule?
There are many very technical exceptions to this rule which operate in extremely specific circumstances. Many of these exceptions have to do with using the letter to prove something other than the facts material to the dispute in court.
One exception is the delay/acquiescence exception which allows a party to refer to “without prejudice” communications to explain delay or apparent acquiescence, and includes belated action or even complete inaction.
For instance, in CSO v CSP and another , the court allowed the first Defendant to rely on portions of “without prejudice” emails to rebut the plaintiff’s assertions that the first Defendant had a) taken no steps to extend the Letter of Credit and b) not taken issue with the Plaintiff’s claim to retention money under the Letter of Credit.
However, unless you are a lawyer yourself, you may not know whether trying to get a “without prejudice” letter admitted in court in the first place is likely to actually help, harm or make no difference to your case.
Even if you can establish that it would help your case, trying to determine whether or not it is a true without prejudice communication or whether or not one of the technical exceptions applies is something on which any two good lawyers should be able to disagree in many cases.
With an area so technical, it is best not to try figuring it out on your own. Therefore, if you are considering using a letter in court sent to you by the other side, you should really consult a lawyer first, and if you can afford it, consider having him/her take over conduct of your case.
What Should I Do If I Receive a Without Prejudice Letter?
If you have to deal with a “without prejudice” letter, and for whatever reason you cannot get some legal advice before any deadline to respond, the best thing to do is to mark your replies “Without Prejudice” and make, accept or reject any offer based on your own resources and risk appetite.
For immediate legal advice, feel free to book a phone consultation with a lawyer via our Call a Lawyer service, who will then call you within 24 hours of the booking to discuss your situation.
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