Parties in any dispute which has the potential to proceed to or is in Court may often mark a letter as ‘Without Prejudice Except As To Costs’. What does this mean? What are the implications? And what are the limitations of its use?
Parties in any type of dispute – be it commercial or civil litigation or a Family Court matter – are always encouraged to settle the matter without recourse to the Court system. In an effort to encourage this, the law grants ‘legal privilege’ to any communications attempting to settle matters. Legal privilege means that a document cannot be relied upon as evidence in any subsequent Court proceedings.
Jim Wilson, Principal of WILSON HAYNES – solicitors, conveyancers and business advisors – said: “Labelling a communication as WITHOUT PREJUDICE can be a vital tool in attempting to reach settlement without having to go to Court. However, the term is often misused. It’s important to only use WITHOUT PREJUDICE in appropriate settlement communications. Using it in other contexts can lead to serious complications with admissibility of evidence.”
WITHOUT PREJUDICE can only be relied up on if the communication is solely for the purpose of negotiating settlement. A document that mentions settlement but also covers other matters, may be only partly privileged and the parts which are irrelevant to settlement may still be admissible in Court.
There are also exceptions to when the term can be used including:
• Where one party reneges on an agreement – the document can be used to prove agreement was reached;
• Where fraud or blackmail is involved;
• Explaining delays in proceedings; and
• Where ‘WITHOUT PREJUDICE – EXCEPT AS TO COSTS’ is used – which means the Court can consider the communication if costs become an issue at a later date.
WILSON HAYNES – solicitors, conveyancers and business advisors – provide expert advice on all commercial, property, wills and estates and family matters. For a FREE 30-minute appointment about your legal matter please call 07 5536 3055.