What ‘Without Prejudice’ really means (and what it doesn’t)

In commercial disputes, parties often try to resolve matters before heading to court. During those negotiations, the phrase “without prejudice” gets thrown around frequently. But despite this, it remains one of the most misunderstood pieces of legal language in business.

In practice, we see “without prejudice” misused all the time. Many people include it because they think it adds weight or credibility to what they’re saying, makes the communication sound more formal or “legal”, and gives an impression of protection. The phrase is often used as though it automatically shields the content from ever being used in court. This false sense of security can be unhelpful and even risky, which is why it’s worth clarifying what the term actually means.

What does ‘without prejudice’ mean?

The without prejudice rule protects genuine settlement discussions from being used as evidence against a party in court. If a communication is a genuine attempt to resolve a dispute, it cannot later be put before a judge as proof of admissions, fault, or liability. It exists to help parties negotiate freely without worrying that concessions will later be used against them.

For the protection to apply, the communication must relate to an existing dispute, or one that’s reasonably contemplated, and be part of a genuine attempt to settle that dispute. If both elements are present, the protection applies – even if the letter isn’t marked “without prejudice”. Conversely, if those elements aren’t present, the label won’t help.

What ‘without prejudice’ does NOT mean

However, “without prejudice” does not automatically make something confidential. A bold heading does not magically cloak the content in privilege. It also does not apply to general commercial negotiations. If there’s no dispute, the protection simply doesn’t exist. The label does not protect wrongdoing; threats, abuse, or improper conduct cannot be hidden behind privilege. The phrase is not the same as “off the record”, which is not a recognised legal principle. Finally, without prejudice protection is not unilateral. One party cannot decide to waive it alone – both sides must agree to waive the privilege in order to successfully waive it.

What is the impact of this on litigation?

Although the without prejudice rule is strong, it isn’t absolute. There are established mechanisms that allow a court to look behind without prejudice material if it appears the privilege is being abused or relied on improperly. If a party believes the label has been applied incorrectly or tactically, they can raise the challenge through correspondence or an application. The court may then privately review the material, without showing it to the other side or admitting it as evidence. The judge looks only as far as needed to decide whether the communication genuinely falls within the rule. If it was not a genuine settlement attempt, the court may rule that the protection does not apply, meaning the content could become admissible. Even where the rule applies, the court may still admit the material under recognised exceptions, including misrepresentation, fraud, undue influence, estoppel, or explaining delay. Where there is evidence of threats, blackmail, or abusive conduct disguised within without prejudice correspondence, the court may lift the privilege entirely.

Because the phrase is so commonly misunderstood, relying on it blindly can lead to real issues. Valuable admissions might be made under the mistaken belief they’re protected. A party may assume complete confidentiality where none exists. Mislabelled communications can trigger time-consuming disputes over privilege that increase costs. Understanding the rule and using it correctly protects your interests far more than any label ever could.

Businesses can use the term properly by only applying it where a dispute exists, making clear when a genuine settlement offer is being made, keeping without prejudice and open correspondence separate, using “without prejudice save as to costs” for formal offers, and seeking advice before making strategic concessions.

Conclusion

“Without prejudice” is a powerful tool, but it is also one of the most misunderstood. Many people use it simply because it sounds authoritative, but true protection only applies in very specific circumstances. When used properly, it encourages candid negotiations and helps parties resolve disputes efficiently. When misused, it creates confusion, risk, and unnecessary legal argument. If you are involved in a dispute and want clarity about what you can and cannot say during settlement discussions – or if you suspect the other side is abusing the privilege – professional advice can make all the difference.

Contact Us

If you’re facing a dispute and need a solicitor, email cclayton@longdens.co.uk or connect with Chris Clayton on LinkedIn and send him a direct message.

DISCLAIMER: The information provided on this blog is for general guidance only and does not constitute legal advice. If you require tailored legal advice, please contact us to discuss your specific circumstances.

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