The Other Side Is Misusing 'Without Prejudice'
The without prejudice rule protects genuine settlement negotiations from being used in court. However, it cannot be used as a shield for threats, fraud, or perjury. Learn when courts will override the protection.
Quick Answer
The without prejudice rule protects bona fide settlement communications from disclosure in proceedings. However, the 'unambiguous impropriety' exception established in Unilever v Procter & Gamble [2001] means that the rule will not protect communications that contain threats, blackmail, perjury, or other plainly improper conduct. Document the misuse carefully before any application to the court.
Full Explanation
The without prejudice rule is a common law and evidential protection that prevents offers and admissions made in genuine settlement negotiations from being admitted in evidence. Its rationale is to encourage parties to speak freely in settlement discussions without fear that concessions will be used against them if negotiations break down. The rule applies to oral and written communications that are genuinely aimed at resolving a dispute.
In Unilever plc v Procter & Gamble Co [2001] 1 WLR 2436, the Court of Appeal confirmed that the without prejudice rule is not absolute. A number of recognised exceptions exist where the court will override the protection. The most practically significant is the 'unambiguous impropriety' exception โ where a party uses without prejudice correspondence to make threats, engage in blackmail, commit perjury, or otherwise act in a way that is clearly improper, the court may admit the communication.
In Oceanbulk Shipping & Trading SA v TMT Asia Ltd [2010] UKSC 44, the Supreme Court confirmed that without prejudice communications can be admitted to establish what facts were communicated as common ground during negotiations โ particularly for the purpose of interpreting a concluded settlement agreement. This is a narrow but important exception used where a settlement was reached but its scope is disputed.
If you believe the other side is marking correspondence without prejudice in bad faith โ for example, to suppress evidence or to make unlawful demands โ you should first write back noting that the without prejudice designation is disputed and preserving all rights. Then consider making an application to the court for permission to rely on the correspondence. You will need to identify clearly which exception applies. Courts are cautious about overriding the rule and will require clear evidence of impropriety.
Also note the distinction between 'without prejudice' and 'without prejudice save as to costs'. The latter allows the correspondence to be shown to the judge on costs after judgment, and is the mechanism used in Part 36 offers. Correspondence marked only 'without prejudice' cannot be shown on costs unless an exception applies.
Legal Basis
- ยงUnilever plc v Procter & Gamble Co [2001] 1 WLR 2436 (CA)
- ยงOceanbulk Shipping & Trading SA v TMT Asia Ltd [2010] UKSC 44
- ยงRush & Tompkins Ltd v Greater London Council [1989] AC 1280 (HL)
- ยงCPR r.36.13 โ Costs consequences of Part 36 offers
What To Do
Preserve All Correspondence
Keep a complete record โ with timestamps โ of all without prejudice correspondence. Do not delete emails or discard letters. The court will need to see the actual communications to assess whether an exception applies.
Write Back Disputing the Designation
Reply to the offending correspondence noting, on an open (not without prejudice) basis, that you dispute the use of the without prejudice designation for the specific content identified, and that you reserve all rights to place the correspondence before the court if appropriate.
Apply to Court to Admit the Correspondence
File an N244 application notice seeking permission to rely on the without prejudice material, identifying the specific exception you rely on (unambiguous impropriety, fraud, perjury, or another recognised exception). The application should be supported by a witness statement setting out the facts clearly.
Consider Costs Sanctions
Even if the court does not admit the WP material in the main proceedings, the conduct of the other party in abusing the without prejudice label may be relevant to costs. Draw the court's attention to the conduct at the costs stage if appropriate.
Important Deadlines
Important Warnings
Courts are strongly protective of the without prejudice rule โ applications to override it are scrutinised carefully and will fail unless the impropriety is clear and unambiguous.
Even if you succeed in having the material admitted, the court may limit its use (for example, admitting it only on costs, not on the merits).
Do not refer to without prejudice material in open correspondence or court documents until you have the court's permission to do so โ doing so may expose you to costs sanctions.
Frequently asked questions
- What is the without prejudice rule and why does it exist?
- The without prejudice rule is a common law protection that prevents offers and admissions made in genuine settlement negotiations from being used as evidence in court. Its purpose is to encourage parties to speak freely during settlement discussions without fear that their concessions will be used against them if negotiations fail. It applies to both oral and written communications that are genuinely aimed at resolving a dispute.
- When can a court override the without prejudice protection?
- The 'unambiguous impropriety' exception allows courts to admit without prejudice communications if they contain threats, blackmail, perjury, or other plainly improper conduct. This exception was confirmed by the Court of Appeal in Unilever plc v Procter & Gamble Co [2001]. It means the rule is not absolute and will not shield communications used to engage in clearly improper behaviour, such as making unlawful demands or suppressing evidence in bad faith.
- What should I do if the other side is misusing the without prejudice label?
- You should first write back on an open basis, not without prejudice, to dispute the designation for the specific content and reserve your rights. Then, consider making an application to the court for permission to rely on the correspondence. You must clearly identify which exception applies, such as unambiguous impropriety or fraud. Courts are cautious and require clear evidence of impropriety before overriding the rule.
- What is the difference between 'without prejudice' and 'without prejudice save as to costs'?
- Correspondence marked 'without prejudice' cannot be shown to the judge on costs unless a specific exception applies. In contrast, 'without prejudice save as to costs' allows the correspondence to be shown to the judge after judgment specifically for costs purposes. This latter mechanism is used in Part 36 offers. If you only mark correspondence 'without prejudice', you generally cannot rely on it for costs without first obtaining court permission under an exception.
- How do I apply to the court to use without prejudice material?
- You must preserve all correspondence with timestamps and not delete emails or letters, as the court needs to see the actual communications. When applying to the court, you should file an N244 application notice supported by a witness statement. You should apply as early as possible, ideally well before any pre-trial review or trial date. Do not refer to the material in open documents until you have permission, as this may lead to costs sanctions.