What is ‘Without Prejudice’?

If you’ve navigated to this article through a search for a movie by the name of ‘Pride and Prejudice’, you’ve taken a wrong turn.

This article explains the commonly used phrase in a legal context. The line proves to be a simple tool that denies other parties the ability to rely on any forms of correspondence, within court proceedings, that you have engaged in with them. Simply put, communications with the phrase attached are inadmissible. The sole intention of the phrase is to assist in the negotiation and resolve of disputes outside of the court.

Intention of the phrase

The intentions in correspondence will be considered to determine whether it is covered or not. It will be covered if it was purely for negotiating a settlement. If the context of communication expressly intended to be without prejudice, then the phrase need not appear. Nevertheless, in the interest of transparency, it is wise to include the phrase. It rests on the situation of settlement negotiation, proving to be critical in the determination of privilege.

Reference to ‘Without Prejudice’

Some legal practitioners believe that the use of phrase ‘without prejudice’ will suffice. Justice Wells in Davies v Nyland (1975) acknowledges this belief, where legal practitioners believe that anything “done or said under its supposed aegis is everlastingly hidden” from the courts. However, in the protections determination, it is understood that a reference to settlement negotiations may not meet the requirements to benefit from such privilege. It rests on the situation of settlement negotiation, proving to be critical in the determination of privilege.

Moreover, such protection may only be granted to particular parts of a document, whilst the remainder is deemed as acceptable for parties to rely on in court.

This is depicted in Redman Constructions Pty Ltd v Tarnap Pty Ltd [2005], where Justice Campbell sheds some insight into whether privilege is granted. In the case, CJ found that there must be a sufficient link between the correspondence and a genuine attempt to negotiate a settlement.

He noted that the expression “in connection with” will not create a strong enough link between any two subject matters. Rather, they require a substantial nexus between the communication and a legitimate attempt to negotiate settlement.

Is the Privilege Absolute?

Like everything, there are various exceptions to the rule. A significant and commonly known exception is that once a settlement is reached and a party reneges on the agreement, the privilege does not prevent communications from being admitted to show that a settlement agreement was actually reached. Additionally, the privilege cannot be used to deny evidence that highlights any misleading or deceptive conduct that occurred in the context of settlement negotiations.

Other Common Law exceptions where ‘without prejudice’ documents should be relied upon:

• to contradict or qualify evidence that is likely to mislead the court
• relevant to determining liability for costs (Cutts v Head exception)
• when an offer was induced by fraud or undue influence and the victim party desires to revoke their interest in the agreement
• where the phrase is used to mask blackmail or other dealings of the same

The protections that ‘without prejudice’ grant is a pivotal tool in assisting parties settle disputes outside of the courts. Nevertheless, in their application, legal practitioners are urged to consider the aforementioned in that a mere reference to the phrase may not suffice and leave them susceptible to their admissions showing up in court. As such, it is essential as a legal practitioner to have a deeper understanding of the link that is required between correspondence and genuine attempts at resolving disputes.

Disclaimer:
SKM Lawyers prepared this article. It is intended to provide general information . The contents do not constitute legal advice and should not be relied upon as such. Formal legal advice should be sought.

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