Understanding the Without Prejudice Rule
A without prejudice letter is a form of communication between parties with the intention of resolving a dispute. It may include proposals or compromises aimed at settling the claim made by one party against another.
The term "without prejudice" means that if the dispute mentioned in the letter proceeds to court, the letter itself cannot be presented as evidence against the writer.
Reasons for the Without Prejudice Rule
The purpose of the without prejudice rule is to enable parties to negotiate in confidence and in good faith, without the fear that any admissions or offers made during the negotiation process could be used against them in court. These communications, such as without prejudice letters, are therefore not admissible as evidence in court proceedings.
Application of the Without Prejudice Rule
In general, a letter cannot be submitted in court if it satisfies two conditions:
a) The letter addresses an actual dispute between the writer and the recipient.
b) The letter attempts to negotiate a resolution or settlement of that dispute.
It is worth noting that the presence of the exact words "Without Prejudice" is not necessary for a court to consider a letter as meeting these conditions and being without prejudice. Conversely, even if the words "Without Prejudice" are included, if the letter does not fulfill these conditions, it may be argued that it should be admissible in court.
Although this may pose practical challenges, the key takeaway is to handle any letters marked "without prejudice" (or any letters attempting to negotiate a dispute resolution) cautiously and refrain from using them in court without seeking legal advice.
What to Do When Receiving a Without Prejudice Letter
If you receive a "without prejudice" letter and cannot obtain legal advice before the deadline for responding, it is advisable to mark your replies as "Without Prejudice." Based on your own resources and risk assessment, you can then make, accept, or reject any offers mentioned in the letter.
However, if you have the opportunity, it is recommended to consult us to better understand your rights and options.