At times, correspondence between parties contains the phrase Without Prejudice, but many people do not know what it means or how the phrase is applied.
If correspondence contains the phrase Without Prejudice, it is used for confidential discussions, both written and oral to attempt to resolve or settle a dispute.
Applying the phrase Without Prejudice to your settlement correspondence lets the other side know that you are willing to discuss a potential resolution of the matter, but the discussions contained in those correspondence do not mean that you are admitting to any liability nor are you waiving any of your rights should litigation commence.
Without Prejudice communications cannot be relied upon in Court (some exceptions apply) if the matter does not settle prior to litigation.
The purpose of allowing these discussions to take place without being raised later is to encourage settlements between the parties without proceeding to Court, and without the risk that those discussions be raised later during litigation.
What if you forget to include Without Prejudice in your correspondence? It does not necessarily mean that the other side can be rely upon it in Court. Correspondence that fails to contain the Without Prejudice phrase cannot be raised in Court if it can be established that the contents of that correspondence indicates a genuine attempt to settle the matter, and where the conduct of the parties clearly exhibit that those communications were made in an attempt to settle the matter.
On the other had, simply including Without Prejudice to any document does not mean that it is protected and cannot be relied upon in Court.
If you are simply sending a letter in the ordinary course of business, and the correspondence does not contain settlement discussions and you include Without Prejudice, those communications can be relied can in fact be upon in Court.
Its all about the contents of the correspondence to determine Without Prejudice applies.
Murray Brown, Licensed Paralegal