What Does ‘Without Prejudice’ Mean?

If you’ve ever been involved in a business dispute or negotiation, you might have come across the phrase “without prejudice” in an email or letter. It’s a small phrase with big implications – and it often causes confusion.

Many people assume that writing “without prejudice” automatically makes a communication legally protected, or that it can’t be used in court. While there’s some truth to that, the real meaning is more nuanced.

In this article, we’ll explain what without prejudice really means in English law, when it applies, and how to use it correctly to protect your position in negotiations or disputes.

The Meaning of “Without Prejudice”

In English law, the term “without prejudice” is used to protect settlement discussions between parties who are in dispute. It means that the content of a written or verbal communication cannot later be used as evidence in court or tribunal proceedings if those negotiations fail.

The idea is simple: it allows both sides to talk openly about settlement without worrying that their words will be used against them later. This protection encourages frank discussions, promotes compromise, and helps disputes resolve more efficiently.

So when a letter, email, or meeting is marked without prejudice, it signals that the communication is part of genuine settlement negotiations and should remain confidential if the case goes to court.

Why the “Without Prejudice” Rule Exists

The rule exists to support one of the key principles of English law – that parties should be encouraged to settle their disputes wherever possible.

Negotiations often require making concessions or exploring potential compromises that don’t reflect a party’s final position. Without the ‘without prejudice’ rule, people might hesitate to negotiate for fear that anything they say could later be used as evidence that they were “in the wrong”.

By protecting those discussions, the law creates a safe space for negotiation – one that’s essential for resolving commercial and employment disputes without litigation.

When the Rule Applies

The ‘without prejudice’ rule only applies if there is an existing dispute and the communication is genuinely aimed at resolving it. Both conditions must be met.

For example, if two companies are in disagreement over an unpaid invoice and one sends a letter marked without prejudice offering to settle for a lower amount, that letter will likely be protected. It’s part of a genuine attempt to resolve a dispute.

But if there’s no real disagreement – or if the letter simply contains threats, accusations, or general statements unrelated to settlement – the protection doesn’t apply, even if it’s labelled ‘without prejudice’.

In other words, it’s not the label that counts – it’s the substance. Courts look at the purpose of the communication, not just the words at the top of the page.

Examples in Practice

Imagine a supplier and a customer in dispute over late payment. The customer owes £10,000 but disputes part of the invoice, claiming the goods were defective. The supplier writes:

“Without prejudice: In the interests of settlement, we are prepared to accept £8,000 in full and final payment.”

If negotiations fail, that letter cannot be shown to the court as evidence that the supplier was willing to accept less than the full amount. It remains private under the ‘without prejudice’ rule.

However, if the supplier wrote:

“Without prejudice: We are considering legal action unless payment is made within seven days.”

That statement would likely not be protected. It’s not a genuine settlement offer – it’s a warning. The label alone doesn’t shield it from being used as evidence.

When “Without Prejudice” Does Not Apply

There are clear limits to the ‘without prejudice’ rule. It doesn’t provide blanket immunity, and there are several exceptions where communications marked ‘without prejudice’ can still be disclosed in court.

For example:

• To prove a settlement agreement – if the parties later dispute what was agreed, the ‘without prejudice’ communications may be admitted to show the terms.
• To explain unreasonable conduct – such as where one party makes discriminatory or threatening remarks during negotiations.
• Where there’s no genuine dispute – communications made in the ordinary course of business aren’t protected simply because they’re labelled ‘without prejudice’.

In each case, the court will examine the context carefully to decide whether the privilege applies.

The Difference Between “Without Prejudice” and “Without Prejudice Save as to Costs”

A related but distinct phrase you might see is “without prejudice save as to costs”.

This means the communication remains protected throughout the main proceedings, but can be shown to the court later when costs are being decided. It’s often used to encourage settlement: if one party refuses a reasonable offer and then loses at trial, the court can look at the ‘without prejudice save as to costs’ correspondence when deciding who should pay legal fees.

In short:

• Without prejudice = completely protected from disclosure.
• Without prejudice save as to costs = protected until after judgment, then admissible for costs purposes.

How to Use “Without Prejudice” Correctly

Many people – including experienced professionals – use the phrase incorrectly, believing it automatically shields any correspondence from disclosure. That’s a mistake.

To use it effectively:

• Ensure there’s a genuine dispute between the parties.
• Make sure the communication is genuinely intended to resolve that dispute.
• Use the phrase clearly at the start of the letter, email, or meeting notes.
• Keep settlement discussions separate from open correspondence – don’t mix the two in the same document.

If you’re unsure whether to mark a communication ‘without prejudice’, seek legal advice. Using the term incorrectly could lead to unwanted exposure or misunderstandings during litigation.

Why “Without Prejudice” Matters for Businesses

For businesses, understanding how and when to use ‘without prejudice’ communications is essential. Whether you’re resolving a contractual dispute, negotiating a commercial settlement, or handling an employment claim, the way you communicate can have major legal implications.

Handled correctly, ‘without prejudice’ discussions can pave the way to swift, cost-effective resolutions. Handled poorly, they can undermine your position in court or expose confidential negotiations to scrutiny.

FAQs About “Without Prejudice”

What does “without prejudice” mean in law?

In English law, the without prejudice meaning refers to a legal rule that protects settlement negotiations from being disclosed in court. Communications made on a without prejudice basis cannot usually be used as evidence if the dispute proceeds to litigation, encouraging open and honest negotiation.

When does the without prejudice rule apply?

The without prejudice rule applies only where there is an existing legal dispute and the communication is a genuine settlement attempt. Both conditions must be met. Simply labelling a message “without prejudice” is not enough on its own.

Does writing “without prejudice” make a document confidential?

No. Without prejudice confidentiality is not automatic. The courts focus on the substance of the communication, not the label. If the message is not part of genuine settlement discussions, it may still be admissible as court evidence, despite being marked without prejudice.

Can without prejudice emails be used in court?

Generally, without prejudice emails are not admissible in court if they form part of legitimate settlement negotiations. However, there are exceptions, including where the communications are needed to prove a settlement or address improper conduct during litigation.

What is an example of a without prejudice communication?

A common without prejudice example is a settlement offer made during a commercial dispute, such as offering a reduced payment to resolve an invoice disagreement. If negotiations fail, that offer cannot normally be shown to the court as evidence of liability.

When does “without prejudice” not apply?

There are several without prejudice exceptions. The rule does not apply where there is no genuine dispute, where the communication is ordinary business correspondence, or where the message includes threats, discrimination, or other improper conduct.

What does “without prejudice save as to costs” mean?

Without prejudice save as to costs means the communication is protected during the case but may be shown to the court when deciding legal costs after judgment. It is commonly used to apply settlement pressure by encouraging reasonable offers.

Is “without prejudice” privilege automatic?

No. Without prejudice privilege is not automatic and does not arise simply by using the phrase. Courts will assess whether the communication was part of legitimate settlement discussions. Seeking legal advice is often recommended before relying on the rule.

Can without prejudice communications be used to prove a settlement?

Yes. One key exception allows without prejudice correspondence to be disclosed to prove a settlement agreement if the parties later disagree about its terms. This often arises in contractual disputes.

Why is without prejudice important for businesses?

Understanding without prejudice for businesses is critical when managing commercial disputes, employment claims, or contract negotiations. Used correctly, it supports effective dispute resolution by allowing frank discussions while protecting your legal position.