Picture this: A long-running dispute is finally nearing resolution. An offer is on the table, and you’ve just received an email marked “Without Prejudice.” Does this mean the other party is admitting fault? Will this email help – or hurt – your position if things escalate?
Understanding when and how to use “Without Prejudice” correctly can be the difference between a smooth settlement and an unexpected legal headache. In this post, we clarify the rules, common pitfalls, and best practices for getting it right.
What Does “Without Prejudice” Mean?
While the use of the words is a bit old fashioned, it is a legal term that essentially means “without harm or detriment to one’s rights or position.”
In other words, by putting the Without Prejudice label on a document, the sender is saying:
- They think that they have certain rights or claims.
- They want to communicate about those rights or claims freely.
- The communication cannot be used against them later down the line.
A common example of where Without Prejudice might be used is when trying to settle a claim:
- Party A has a claim for £100,000, but thinks that if they went to court, there is a possibility they could be awarded a lot less.
- They send an email to Party B offering to settle their claim for £75,000 and mark the offer as being Without Prejudice.
- Party B rejects this offer. The dispute ends up in court and Party A claims the full £100,000.
- Because the email was marked Without Prejudice. Party B is not allowed to show the judge the email and cannot claim that the email proves that Party A thinks they are only entitled to £75,000.
The courts are happy to uphold the Without Prejudice protection because it means that parties can discuss the merits of their claims openly. This means that more claims are settled without having to go to court.
The same principle applies in adjudication and arbitration.
Should I just put “Without Prejudice” on everything then?
You can but you shouldn’t. Doing so is unlikely to have the effect you hope it will, and might even cause you problems. Just because a a document has Without Prejudice written on it it does not mean it will have that protection.
The reason for this is that the Without Prejudice protection only applies to communications where a party is genuinely trying to settle a dispute.
The opposite is also true: a document that is genuinely trying to settle a dispute may be deemed to have Without Prejudice protection even if it does not use those words.
So when should I use “Without Prejudice”?
If you are making admissions in documents where you are genuinely trying to settle a dispute, it is always safer to put it on the document than not.
Examples of circumstances where you might want to consider using Without Prejudice:
- Payment Disputes: Using Without Prejudice offers to resolve disagreements over valuations, retention, or final accounts.
- Delay & EOT Claims: Discussions over entitlement to extensions of time or liquidated damages.
- Defects or Quality Issues: Proposing remedial measures or compensation to avoid escalation.
It is not only letters and emails that can be Without Prejudice. Telephone calls and in person or online meetings can be held on a Without Prejudice basis too. If a meeting is to be Without Prejudice then is a good idea make sure that this is recorded somewhere, such as in the meeting minutes.
What to be careful of
People often overuse Without Prejudice which can cause problems. For example:
- If you later want to rely on that document as evidence in adjudication, arbitration or court, its Without Prejudice label might lead to challenges or objections from the other side.
- Many construction contracts require formal, open correspondence for notices, such as notices of delay, default, termination or payment notices. If these communications are mistakenly marked Without Prejudice, you might not be able to rely on them later.
Top Tips for Using “Without Prejudice”
Use it only for genuine settlement discussions. Don’t overuse the Without Prejudice label. Only apply it to communications that are clearly intended to resolve an existing dispute. Misusing it can lead to confusion or even make critical evidence inadmissible later.
Separate formal notices from settlement offers. Avoid marking contractual notices (like delay or payment notices) as “Without Prejudice.” These must remain open correspondence to comply with the terms of your construction contract.
Always record verbal Without Prejudice discussions. If you hold a meeting or call on a Without Prejudice basis, make sure it is clearly noted in any minutes or follow-up emails. This avoids misunderstandings about the status of the discussion.
How CCC can help
At CCC, we bring decades of expertise to help contractors, subcontractors, and employers navigate the complexities of construction and commercial disputes. Whether you need guidance on drafting or responding to Without Prejudice correspondence, or strategic advice on resolving disputes, we’re here to support you every step of the way.
Our team has extensive experience in advising and assisting parties involved in all manner of issues including adjudications, arbitrations, contractual disputes and payment disputes.
We understand the pressures of the construction industry and work to deliver tailored, practical solutions to safeguard your business and its interests.
