During legal disputes parties will often send each other correspondence that is marked either “Without Prejudice” or “Without Prejudice Save as to Costs”.
Both expressions mean slightly different things according to the Law but are significant in legal terms.
Without Prejudice correspondence has been recognised by legal courts for more than 50 years as being correspondence that is “in aid of settlement”. In the order course Without Prejudice correspondence is a correspondence by which one party makes an offer to another party to settle a dispute. The offer can be accompanied by commentary (such as the making of concessions or admissions) but done so on a without prejudice environment. If correspondence is marked without prejudice and determined by the Court to be “in aid of settlement” it is inadmissible in any legal proceedings, meaning that the party receiving the correspondence cannot produce the letter to the Law Court as evidence in any current or subsequent proceedings. Essentially the policy behind the Court’s recognising Without Prejudice correspondence as being what is known as privileged correspondence (meaning it cannot be lead in evidence) is to encourage parties to communicate freely in settlement discussions – with a view of driving the parties towards an agreement (without the fear of having the content of their Without Prejudice correspondence subsequently used against them in the event that the dispute does not settle.
Without Prejudice Save as to Costs correspondence or Without Prejudice Except as to Costs correspondence attracts the same privilege as Without Prejudice correspondence save that either party is entitled to rely upon the correspondence or lead evidence of such correspondence but solely in respect to the Court’s determination of the payment of legal costs. It is important to note that merely marking correspondence with Without Prejudice or Without Prejudice Save as to Costs will not attract without prejudice privilege unless the correspondence itself can be characterised as being in aid of settlement (ordinarily meaning it will need to include an offer or concession of some description that leads towards a settlement). Very careful consideration should always be taken by any person (whether a Lawyer or not) in making any offers to settle a legal dispute between themselves and another party as to whether such offer of settlement should be either done on an open basis, a Without Prejudice basis or Without Prejudice Save as to Costs basis.