Without Prejudice: A Legal Shield for Settlement Discussions

In legal disputes, the phrase ‘without prejudice’ plays a pivotal role. Commonly used in letters, emails, and settlement discussions, it acts as a protective legal mechanism that enables parties to engage in candid conversations aimed at resolution — without the risk that those discussions will later be used against them in court. However, it’s important to understand that ‘without prejudice’ is not a blanket guarantee of confidentiality.

What Does ‘Without Prejudice’ Mean?

When a communication is marked 'without prejudice', it indicates that the content is part of a genuine attempt to settle a dispute — and cannot be used in evidence if negotiations break down. This legal privilege encourages openness, allowing parties to explore options without weakening their formal legal position.

This protection applies to both written correspondence and verbal exchanges — including emails, letters, phone calls, and mediation sessions.

Tip: Not all settlement-related conversations need to be marked ‘without prejudice’ to be protected — but doing so helps make your intention clear.

Why Use ‘Without Prejudice’ in Dispute Resolutions?

Using ‘without prejudice’ allows parties to:

• Negotiate freely without fear of admissions being used against them;

• Make offers and concessions without appearing to accept fault;

• Focus on resolution rather than escalation or litigation.

  
  

This tool helps shift the dynamic from “who’s right” to “what’s workable.” It creates space for creative, confidential problem-solving — especially in commercial disputes or ongoing relationships.

When Does It Apply (and When Doesn’t It)?

It’s a common misconception that simply labelling a document ‘without prejudice’ automatically protects it. The protection only applies if:

• A genuine dispute exists; and

• The communication forms part of a bona fide attempt to resolve that dispute.

  
  

It will not apply to:

• Routine commercial negotiations where no dispute exists;

• Communications that lack any attempt at compromise;

• Or documents that are deliberately misleading or improper.

  
  

Example: A letter marked ‘without prejudice’ that merely restates a party’s legal position — without any offer or concession — may not attract protection.

What Are the Limitations?

While powerful, the ‘without prejudice’ rule isn’t absolute. Communications may become admissible if:

• Both parties consent to disclosure;

• The court is deciding on costs, where the reasonableness of settlement conduct is relevant;

• The content reveals misleading or deceptive conduct, coercion, or bad faith.

  
  

These exceptions ensure the rule serves its purpose — to facilitate fair resolution — without enabling procedural abuse.

Final Tips

Used correctly, ‘without prejudice’ is a valuable tool in legal and commercial negotiations. It supports open, resolution-focused dialogue without undermining legal rights.

However, misuse can create a false sense of protection — or worse, lead to unintended legal consequences. If you're unsure about whether to use the phrase — or whether a communication will attract protection — it's always wise to get legal advice.

TL;DR

• ‘Without prejudice’ protects genuine settlement discussions from being used in court;

• It doesn’t apply to all communications — only those involving a real dispute and a genuine attempt to settle;

• Protection isn’t absolute and can be lost through bad faith or by agreement;

• Use it wisely and consult a lawyer when in doubt.