´Without Prejudice´ - When Will It Apply?

When parties are negotiating the settlement of dispute, they will often do so on a ‘without prejudice’ basis. This allows the parties to make statements or offers in the course of negotiations on the basis that they will not be used in court as admissions of liability.

Communications which are ‘without prejudice’ are not admissible in court. This is to encourage litigants to settle their differences rather than litigate them to the finish.

Whether communications are protected as being ‘without prejudice’ depends on the intention of the parties, which may be inferred even though the communication is not expressly made ‘without prejudice’. Conversely, an endorsement ‘without prejudice’ does not automatically give communications privileged status. For communications to be ‘without prejudice’ there must be a dispute in issue and the terms of the communications must seek a compromise of the dispute, or have some bearing on the settlement negotiations.