The rule on ‘Without Prejudice’ and ‘Without Prejudice Save As To Costs’

28 December 2022 | Raj Laxman

What does it mean when oral or written communication are referred to as ‘Without Prejudice’ and ‘Without Prejudice Save As To Costs’?

It is important that as a businessperson you understand the difference to avoid legal complications.

Oral or in written communication subject the ‘Without Prejudice’ rule cannot be used as evidence or disclosed in a court of law. The case of Suh v Mace (UK) Ltd [2016] gives legal authority about this rule. The Court of Appeal directed that the rule on ‘Without Prejudice’ applies to the admissibility of evidence and excludes as evidence all negotiations between the parties whose purpose is to genuinely reach a settlement. The exceptions are to prove the fact of a concluded settlement agreement.

For a communication to be accepted as “Without Prejudice” there must be a dispute between the parties, and it must form part of a genuine attempt to resolve that dispute. However according to the case of Unilever plc v Procter & Gamble Co [2001] it is not necessary to mark it as “Without Prejudice” as it can be implied that it has such privilege. It is of course recommended that the communication be marked “Without Prejudice”. It is clear from the case of Sternberg Reed Solicitors v Harrison [2019] that communication that was intended to be implied Without Prejudice may be considered when the court assesses costs.

Without Prejudice communication can be admissible in court in two circumstances. Firstly, it must be proven the communication is not Without Prejudice. This can be argued even if the document is headed Without Prejudice. Secondly, the Without Prejudice document can be subject to exceptions to the rules which means the rule will not apply. The exceptions mostly apply when where there is unlikely to be any prejudice arising from the disclosure. Examples are to prove a settlement agreement had been entered and to construe the terms of a settlement agreement. To prove the late submission of communications. To give evidence of grounds to set aside a decided settlement agreement on the grounds of misrepresentation, fraud, or undue influence. To prove as evidence of, blackmail, lying under oath or other major unambiguous impropriety

Under the rule in Walker v Wilsher [1889] Without Prejudice communication usually cannot be taken into consideration. The exception to the Without Prejudice rule is the rule on Without Prejudice Save as to Costs. According to the rule if discussions and negotiations are undertaken under the rule of Without Prejudice Save as to Costs, they are admissible when costs are considered by the court. Prior to the costs assessment the communication will keep its Without Prejudice privilege.

This article is only intended as guidance. If you have a specific legal enquiry, please contact a legal advisor at the Quest advice line on: 0116 274 9193

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