When trying to settle a dispute or claim amongst employers and employees, the term “without prejudice” may be mentioned. It is important in these circumstances to understand its definition and whether it needs to be used. But what does “without prejudice” mean, when should it be used, and how can it help with employment tribunals?
The Definition of Without Prejudice
Oxford Reference defines “without prejudice” as “a phrase used to enable parties to negotiate settlement of a claim without implying any admission of liability.” If one party is making a genuine attempt to settle a claim, this confidential interaction will be marked “without prejudice” (WP) and will not be admissible in court or tribunal.
If both parties choose to negotiate openly rather than confidentially, this correspondence and conversation can be disclosed to the court or tribunal.
The Purpose of Without Prejudice
The main purpose of the “without prejudice” rule is to encourage both parties to try and settle the dispute out of court without weakening their position. It empowers both employees and employers to speak openly and freely without the fear that what they are discussing will be used against them. This rule only applies to those that are genuine attempts to settle the dispute and can be made either in writing or verbally.
Requirements for Without Prejudice
It is vital that the “without prejudice” correspondence sent to the other party is clearly marked as so; this is normally at the top of the document or in the subject line of an email. This correspondence can be sent by any party by letter or email and does not need to be via a solicitor. If it is not clearly marked, it will most likely be considered as an “open” correspondence and could be admissible in court or tribunal.
Other requirements for without prejudice communications are:
- There is an existing dispute at the time of the communication.
- A settlement offer is made and is a genuine attempt to settle the dispute.
- If it is a verbal exchange rather than in writing, it needs to be clearly stated by the party that they wish to speak without prejudice at the start of the discussion. Remember to seek confirmation from the other party that they agree to this communication too.
Once you have confirmed that the conversation will be “without prejudice”, the terms of the offer must be put forward and the response will either be decided then and there or it will be discussed within the relevant party and responded to at a later date. It is also recommended to explain why the without prejudice offer is being made.
Forgetting to Label Without Prejudice
If any interaction is not labelled “without prejudice” but forms a part of a genuine attempt to settle the dispute and conduct supports that it was intended to be without prejudice, the confidentiality rule will still apply. This may lead to a costly dispute however, so it’s important to remember to label the correspondence.
If any interaction is labelled “without prejudice” but the correspondence does not reflect a genuine attempt to settle the dispute, it will not guarantee confidentiality.
Exceptions to the Without Prejudice Rule
There are a few exceptions where a court can allow without prejudice correspondence to be used in court. These include:
- Where there is a dispute as to whether or not there is a concluded settlement agreement between the parties
- Where there is not yet a dispute between the parties
- Where all parties agree to waive privilege
- Where there is ‘unambiguous impropriety’ by one or more parties; this means there is evidence of illegal activity or undue influence such as fraud, misrepresentation, blackmail, etc.
- Where there is a statement in the material that may give rise to an estoppel; this is defined as “a rule of evidence or a rule of law that prevents a person from denying the truth of a statement he has made or from denying the existence of facts that he has alleged to exist.”
- Where there is an explanation required for a delay
What Does “Subject to Contract” Mean?
“Without prejudice subject to contract” refers to correspondence regarding settlement terms that are not binding until a contract has been finalised and the terms have been agreed to in full.
What Does “Save As To Costs” Mean?
“Without prejudice save as to costs” refers to correspondence not being admitted as evidence to court or tribunal unless it is being used to support or contest an application for costs. It can be used to persuade the court or tribunal that the party has acted reasonably to try and settle the dispute, so any cost orders should reflect this.
What is the Difference Between “Without Prejudice” and “Protected Conversation”?
Protected conversations were introduced in 1996 under S111A of the Employment Rights Act. The difference between without prejudice conversations and protected conversations is that there does not need to be an ongoing dispute for a protected conversation. They have the same goal as a without prejudice conversation to reach an agreed settlement however, if there are future disputes, these conversations are not protected.
If you’ve submitted an employee tribunal claim or you’re trying to reach a settlement agreement and you need assistance, Premier Legal are here to help. We offer experienced employment tribunal representation and are well-equipped to advise and support you through your settlement agreements. Contact us today to find out more.
