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Without prejudice is a term frequently used in law, but it is often misunderstood and misused by parties representing themselves and even some lawyers!
At its most basic meaning “without prejudice” means that any statement made by a party to try to settle a dispute will not be used against them in court. In other words, what is said is without prejudice to their legal position. It is a legal concept that is designed to encourage parties in a dispute to make offers to settle cases as soon as possible.
Communications which are “without prejudice” cannot be used as evidence in court proceedings or other legal actions, providing the offer represents a genuine attempt at settlement. In other words, communications, discussions and proposals that are “without prejudice” cannot be used against you as evidence if the dispute is not resolved and it goes to court. There does not need to be litigation afoot or even a threat of litigation, but there must be a genuine dispute. A contested financial settlement following divorce/dissolution would fall into the category of a ‘dispute’.
Whereas an “open” communication or correspondence can be referred to the court at any time.
Using the “without prejudice” label on communication can encourage parties to be more open and frank in their discussions, as they know that what they say cannot be used against them in court. This can often help to facilitate settlement and avoid the need for costly and time-consuming litigation.
When making a statement or communication on a without prejudice basis you do not necessarily need to say or mark it with the word “without prejudice” to be protected by the without prejudice rule. That said, it is good practice (and to avoid any doubt or ambiguity) to mark it clearly at the top of any document or in the subject line so that it is instantly clear to the reader. However, you should avoid indiscriminate use of labelling documents “without prejudice” which is often commonplace as this causes confusion and could end up in a dispute in determining whether a statement or communication is actually protected by “without prejudice”.
In any discussions or meetings, it is good practice to state at the outset that the discussions are “without prejudice” and to seek confirmation from the other party that they agree.
Be warned just marking a communication “without prejudice” may not mean it is actually protected by “without prejudice” privilege, because the communication must represent a genuine attempt to settle. Although such a label can be seen to be indicative that a communication is “without prejudice” it is not determinative.
When the term “without prejudice” is used at the outset of correspondence but is subsequently omitted, all subsequent correspondence should still be considered protected by without prejudice. This protection applies as long as the ongoing negotiations are genuinely connected to the existing dispute. To prevent any ambiguity or dispute if the chain of communication breaks, it is advisable to clearly mark in the correspondence whether it is “without prejudice” or not.
In certain cases, the term without prejudice save as to costs can be used. This label is used less often in family proceedings and is frequently used in civil proceedings such as in property disputes in relation to unmarried couples. If the term “without prejudice save as to costs” is used it means that while the substantive discussions and offers made during negotiations are protected from being used in court, they can be considered by the court when considering costs at the end of the case. A party may want to refer to the other party’s conduct or approach to the negotiations and after the court has dealt with the substantive issues of the case the judge can be asked to consider the without prejudice save as to costs communications and decide whether there should be any costs consequences for either party.
Open offers can be referred to the court at any time. They will set your case out at the highest or best position to the other side of the dispute. An open offer should only be made if you are confident in your position and happy for it to be shown to a judge. It tells the judge what you would be prepared to settle for.
If you are currently in financial remedy proceedings connection to the dissolution of your marriage or civil partnership, then there is an obligation to put forward an open proposal 14 days after your Financial Dispute Resolution Hearing.
As you will have already read Without Prejudice offers cannot be referred to the court at any time. The only exception to this rule is if you are in financial remedy proceedings and you are proceeding with a Financial Dispute Resolution Hearing then without prejudice offers are shown the to the Judge for this hearing only. The purpose of this hearing is for the Judge to provide an indication of what he/she considers the likely outcome of the dispute to be if the case proceeded to a final hearing. The Financial Dispute Resolution hearing is a without prejudice hearing and is designed to assist the parties in reaching a resolution and the contents of this hearing and any without prejudice offers cannot then be referred to at the final hearing, nor can the Judge who deals with the Financial Dispute Resolution hearing have any involvement in the final hearing.
A without prejudice save as to costs offer or a “Calderbank” offer (named after the case Calderbank v Calderbank ) means that while the substantive discussions and offers made during negotiations are protected from being used in court, they can be considered by the court when deciding how to allocate costs at the end of the case. Since 2006 Calderbank offers have become limited in their use in family proceedings and they are now only relevant in specific types of family proceedings such as Appeals, interim applications, enforcement applications or where a third party has been joined to proceedings.
In circumstances where an order made by the court is better than a party’s Calderbank offer, then their Calderbank offer can be referred to the court on the question of costs, arguing that they have “beaten” their Calderbank offer, and that it would have been reasonable for the other party to accept the Calderbank offer and avoid the costs of a contested hearing, seeking a costs order in their favour to reflect this.
When a without prejudice proposal is accepted, all communications in relation to it become automatically open and therefore can be referred to the court.
There are some exceptions to the “without prejudice” rule a few of the main ones are:
Lastly, whilst the concept of without prejudice is commonplace when dealing with financial disputes following a separation or divorce its use is generally discouraged when trying to resolve disputes regarding children such as with whom a child should live or how much time they should spend with each parent. As such you should not rely on without prejudice privilege in negotiations about child arrangements as the court may say that the WP rule does not apply and that any communications can be referred to openly in any court proceedings.
As you will have read, without prejudice can be a complex concept and it is important to be careful when using it during negotiations. We would always recommend speaking to one of our experts before commencing any negotiations. Please contact us to discuss your individual circumstances.
Raj Patel is a Solicitor in our Brighton team of experts.