The without prejudice rule has long been part of South African
law. This rule provides that statements, including admissions of
liability, made in an attempt to settle litigation between parties,
are not admissible in subsequent litigation between them.
Underpinning the rule is that the parties should be encouraged to
avoid litigation by resolving their disputes amicably in frank
discussions, without the fear that if negotiations fail, admissions
made in the course of their negotiations may be used against them
in subsequent litigation.
Until very recently, there was one exception to this rule
– admissions of insolvency made on a without prejudice basis
may be admissible. However, the Supreme Court of Appeal
("SCA") has now confirmed a second
exception – where an acknowledgment of indebtedness is made
by a debtor to a creditor, even on a without prejudice basis for
the purposes of settling litigation, the acknowledgment may be
admissible for the purpose of
