Without Prejudice: What It Means and What Happens If You Breach It
Updated: Oct 10
If you have ever been involved in a dispute, you may have seen a letter or email headed "without prejudice". It looks formal, but the idea is simple. This guide explains what without prejudice means, how the rule works in England and Wales, and what can go wrong if it is breached. It is general information, not legal advice for your own case.
What does "without prejudice" mean?
The words "without prejudice" appear in legal letters, emails and meetings. They mean the discussion is a genuine attempt to settle a dispute. If the talks fail, what was said or offered cannot normally be used against the person who said it.
The rule exists to encourage honest settlement negotiations. People are more willing to make offers and admit weaknesses when they know their words will not be held against them later.
A simple example
Imagine one side offers a sum of money in a protected letter to end a dispute between two businesses. The other side says no, and the case goes to trial. The offer cannot normally be shown to the judge as proof of anything.
When is without prejudice used?
The label is used when people are trying to resolve a disagreement without a full court hearing. It is common in:
Settlement talks: to discuss terms freely.
Offers of compensation: to propose a payment or a compromise.
Dispute resolution: including mediation and negotiation between lawyers.
Employment disputes: when an employer and employee discuss how to part on agreed terms.
Settlements are often recorded in a settlement agreement. Once signed, that agreement is usually an open document. It records the deal that ended the dispute.
What are the rules for using without prejudice?
Writing the words at the top of a page is not enough. A court looks at what the communication really is. See below for what it should be to qualify:
Be a genuine attempt to settle a dispute that already exists.
Be made, or understood to be made, on a without prejudice basis.
Not contain threats, dishonest statements or improper behaviour.
The label helps, because it shows what both sides intended. It is not conclusive. A letter with the label may still be used if it is not part of real settlement talks. In the same way, a letter without the label can still be protected if it was clearly part of negotiations.
Without prejudice save as to costs
You may also see the phrase "without prejudice save as to costs". This is a different, narrower label. The offer stays private while the case is decided. After judgment, either side may show it to the judge when the court decides who should pay the legal costs.
The point is simple. A party who turned down a reasonable offer and then did no better at trial may be asked to pay more of the costs. The Civil Procedure Rules also set out formal offers to settle, known as Part 36 offers. They work in a similar way and have their own special consequences. Take legal advice before you rely on either one.
What happens if without prejudice is breached?
Breaching the rule means using protected material when you should not. For example, you may quote a settlement offer to the judge. Or you may share it with people outside the dispute. The results can be serious.
For the person who breaches it
Loss of trust: the court and the other side may take a dim view of your conduct.
Evidence excluded: the judge can refuse to look at the material you tried to use.
Costs: you may be ordered to pay extra costs for the argument the breach caused.
Weaker position: the other side may become less willing to negotiate with you.
For the case itself
Talks may collapse: once trust is lost, a settlement is harder to reach.
Higher costs: a longer dispute usually means more expense for everyone involved.
Are there exceptions to the without prejudice rule?
Yes. Protected material can sometimes be used in court. The main examples are:
Proving a deal was reached: if the parties agreed terms, the letters can show that a binding settlement exists.
Fraud or misrepresentation: the rule does not let someone use negotiations to lie or to cheat.
Clear impropriety: a court may allow evidence of threats or other abuse of the privilege, but only in very clear cases.
Costs: under "without prejudice save as to costs", the offer may be shown once the main issue is decided.
The courts apply these exceptions narrowly. The rule is there to protect honest negotiation, so judges are slow to let it be set aside.
Employment cases and protected conversations
Employment law has its own related rule. Under section 111A of the Employment Rights Act 1996, some pre-termination discussions about ending a job on agreed terms cannot be used in an ordinary unfair dismissal claim. This protection has limits, for example where there has been improper behaviour. You can read the section on legislation.gov.uk. For practical information about agreeing an exit, see the guidance on settlement agreements from Acas.
If you are offered a settlement agreement at work, our guide on whether you need a solicitor for a settlement agreement explains why advice is usually needed.
How to avoid breaching without prejudice
Label it clearly: mark settlement letters and keep them separate from open letters.
Keep it private: do not share these discussions with people who are not part of the dispute.
Do not quote it in open letters: if you need to refer to an offer, ask your lawyer how to do it safely.
Be honest: do not use negotiations to mislead the other side.
Take legal advice: if you are unsure, speak to a lawyer before you send or use any material.
Careful drafting matters too. If you are sending a formal demand, our letter before action template shows how an open letter is normally set out. Settlement offers should come separately, in their own letter.
Why does the without prejudice rule matter?
This rule creates a safe space for negotiation. It lets each side test the other's position and make offers. Neither side needs to fear that every word will be used at trial. Most disputes end in a settlement rather than a trial, so the protection is used every day.
It also saves time and money. A dispute that settles early costs far less than one that goes the full distance to a hearing.
Final thoughts
Understanding the rule helps you negotiate with confidence. Use the label carefully and keep settlement talks private. Never use protected material in court unless you know an exception applies. If you are unsure, get legal advice before you act.
To discuss a dispute you are trying to settle, please contact us. You may also find our guide to breach of contract lawyers useful.
