What Does “Without Prejudice” Really Mean?

If you’ve ever been involved in a legal dispute, you’ve probably seen the words “without prejudice” stamped across a document, letter or email. But what does it actually mean?

In simple terms, “without prejudice” protects settlement discussions from being used against you in court. It creates a safe space for negotiation, so you can make offers, explore compromise, or admit weaknesses without fearing those words will come back to bite you later.

However, marking a document “without prejudice” does not necessarily always make it protected. A court can determine what the communication really is, not what you call it. It is the substance that matters, not the label. To gain protection, the communication must be a genuine attempt to resolve a dispute.

Further, marking communications as “without prejudice,” when these relate to general commercial discussions that do not involve a conflict requiring resolution (especially where there is no prospect of litigation) does not make them privileged. Similarly, letters of demand that do not contain settlement offers are also unprotected.

A common misconception surrounding the use of “without prejudice” in written communication is that it can be applied to statements, allegations, or other material (not related to commercial disputes) that people may be reticent about putting in writing lest there be legal consequences, and that the documents in question will automatically be inadmissible in court. This is a fallacy.

There are also limits that apply to “without prejudice” communications. These can be revealed if a party is acting dishonestly, if there is a dispute about whether a settlement was reached, or if the message is marked “without prejudice save as to costs” — a special category of “without prejudice” communication that remains hidden until the end of a case and when the issue of costs is considered.

Used correctly, “without prejudice” is a powerful tool. It encourages open dialogue, reduces conflict, and often leads to faster and more cost-effective resolutions. If you have questions about your dispute or the appropriate use of “without prejudice” communications, it is important that you seek legal advice. Rankin Business Lawyers can advise in these matters.

Ming Yip
Lawyer