If you have ever received a formal letter in relation to a dispute you may have seen the phrase “without prejudice” used at the beginning of the letter, but many people don’t know what this actually means.This is a legal term and if used on any type of document whether it is a letter or a monetary offer of settlement, it can protect your position.
Lets say that you were a landlord and you have a dispute with a tenant in a rented property over a broken cooker, this is just one of the situations that without prejudice could be used. In this fictional scenario as a landlord, you are fairly certain that the tenant has damaged the cooker through misuse but they maintain the cooker was broken when they took on the tenancy.
The cooker was new and a replacement is going to cost you hundreds of pounds. As you are a landlord with lots of properties to manage you don’t want to deal with a court claim.
You would be willing to accept half the cost of a new cooker from the tenant as a settlement so you can move on and overcome the dispute.
While you are hoping to reach an agreement by negotiating a settlement figure, doing so may jeopardise your case. How? Well if you cannot reach an agreement with the tenant but you are willing to accept half of the money for the replacement cooker a judge may think that if you were willing to accept half the full amount that you were asking for, the full amount is not justified.
Therefore the judge may dismiss your claim.
Making Without Prejudice Offer
A way to address this is to make your offer without prejudice. This means that if the claim did proceed to court this offer would remain completely confidential and would only be disclosed to the judge after they had reached a decision about your case. If the judge feels that the case you have presented is not the strongest, they may suggest that the landlord is entitled to at least half the cost of replacing the cooker.
This is when the landlord could present their without prejudice offer to the judge and state that they did attempt to settle earlier on but this was rejected. Based on this information, the judge may consider making a costs order against the defendant which would require the defendant (tenant) to pay a higher level of legal costs than usual.
Often this approach is taken when there has been a genuine offer to settle but the defendant has refused and wasted the court’s time when the case could have been settled sooner.
Litigation and Without Prejudice
The scenario above is a very straightforward case but what happens to ‘without prejudice’ in a litigation case? When it comes to more serious cases that require involvement of a solicitor there are always attempts made to settle a dispute. Solicitors usually have two sets of correspondence in a case, without prejudice correspondence which is confidential and open correspondence.
A solicitor may draft a strongly worded letter to the defendant stating what is wrong with a particular case but then also include an envelope marked without prejudice. Within this envelope would be an offer to settle the claim.
If the defendant rejects this offer of settlement and the case proceeds to trial, the open correspondence will be made available for review by the judge. It is crucial however not to send the without prejudice documentation to the judge. If the judge does see this they may instruct a re-trial which can be very costly.
With any type of without prejudice correspondence, there are several main principles:
- In order to use without prejudice there must be some kind of dispute
- Any letters you send or discussions that you enter into must be done in such a way to resolve the dispute
- Without prejudice negotiations must be kept confidential and not disclosed to the judge if the matter proceeds to court.
Some correspondence could be classed as being without prejudice even if you do not say so. This is why it is important to clearly write without prejudice on any letters which are relevant so there is no misunderstanding.
If you participate in any without prejudice discussions it is very important that you take note of what is said during the discussion.
There are many instances where without prejudice will be used, but it is most commonly found in formal dispute letters either between two individuals or a company and an individual. If you receive any ‘without prejudice’ offers it is important that you carefully consider them and seek legal advice. Failing to do so may affect your case at a later stage.
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