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Without prejudice – what is it?
Without prejudice is one of those legal phrases which are often used in casual conversation, but what does it really mean?
Without prejudice is a useful way of protecting your position in a dispute. Say you are a landlord and have a dispute with your tenant about a broken fridge freezer.
You are pretty sure that they damaged it during a party, they are positive that it was already broken when they took the flat over. It was brand new and to get a replacement is going to cost you £600.
You are very busy right now and don’t really want the hassle of dealing with a court claim. You would be prepared to accept just £300 just to get rid of the problem so you can move on.
However, if the matter can’t be settled and you DO have to go to court, you would want to claim the whole £600. If you offer to accept £300 now, will this prejudice your claim? Will the Judge say “Well if they were prepared to accept £300 for it back in August, their claim for £600 must be grossly inflated and should be disallowed?”
The answer is that if the offer is made ‘without prejudice’ he won’t (or shouldn’t) ever see it. Because without prejudice offers are confidential, and information about them should not be given to the Judge (or arbitrator if this is an arbitration) during the hearing.
The only time the Judge gets to hear about the offer is after Judgment is made. If the Judge, quite independently, comes to the conclusion that the landlords’ case is not the best, but that he should at least be entitled to £300, the landlord can say ‘Well I made an offer to settle for that back in August, but the other side rejected it”.
Then the Judge may decide to make a costs order, ordering the tenant to pay more in legal costs than he would normally, on the basis that the tenant has been wasting his time as the case could have been settled earlier. The courts are so busy now, and so underfunded, that wasting the Judge’s time is almost a capital offence.
Using without prejudice in legal cases
The example above is only a small fictitious case to illustrate the point. In big litigation cases run by solicitors, there are always negotiations to settle (and in fact, most cases are settled before trial). The solicitors will generally have two completely separate sets of correspondence, the ‘open’ correspondence and the ‘without prejudice’ correspondence.
So, for example, the solicitors might write quite an aggressive letter setting out all that is wrong about the other side’s case, and then in the same envelope include a ‘without prejudice’ letter offering to settle the claim for £5,000!
If the attempts to settle fail and the claim comes to trial, the open correspondence is generally put in a bundle for the Judge to see. It is very important when doing this that none of the ‘without prejudice’ correspondence is included by mistake as if it is and the Judge sees it, in some cases, there may have to be a re-trial. Which could be very expensive.
So that is without prejudice.
Three important points
There are three important things you need to know about without prejudice. To be able to use it, and prevent your discussions being used against you if your case comes to trial:
- There must be a genuine dispute underway
- Your discussion/letter must be a genuine attempt to resolve it, and
- You must keep your ‘without prejudice’ negotiations private or you may lose your right to confidentiality.
Also note that correspondence can be judged to be without prejudice even if it does not say it is, but it is best to write ‘without prejudice’ on the letter anyway so there can be no mistake. And if you have ‘without prejudice’ discussions, make sure you keep a careful note of everything that was said.
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