When a dispute arises, you may try to iron out any differences early on. Court proceedings may be a distant possibility at this stage. But when trying to resolve a dispute, it is always worth thinking about the impact of your actions in any later litigation.
Without prejudice is a good example.
Communications which are ‘without prejudice’ are not admissible in court proceedings. This means that if proceedings are started, the court usually cannot see any concession or offers you may have made.
You can protect your position by making it clear, at the start of any settlement discussions or in written communications, that the contents are ‘without prejudice’. For the rule to apply the communication must be a genuine attempt to settle the dispute. So you shouldn’t include these words in every communication if the contents are not aimed at settlement. Otherwise it is more than likely that your claim to without prejudice privilege could be challenged.
Can the court ever look at the without prejudice communications?
Sometimes, but only in limited circumstances. For example, the court may want to see the communications to decide if a concluded settlement was ever reached or to interpret the terms of a settlement agreement. But these instances are not that common.
What if the other party unreasonably refuses an offer?
If you think that the other party is being unreasonable, “without prejudice except as to costs” offers are a useful option. The offer is still without prejudice but only until the court has given its judgment. The court can then consider the offer and take it into account when deciding who will pay the costs of the litigation. A useful tool if you feel that you may be put to the inconvenience of court proceedings.
Taking this one step further, there are certain procedural offers that can be made under the court rules known as ‘Part 36 offers’. These offers are without prejudice except as to costs but can have tactical benefits. There are automatic costs consequences if you obtain a judgment which is more advantageous than your offer. The offers can be made even before proceedings are started. Defendants can also make Part 36 offers.
Court proceedings may well be a last resort. But the without prejudice rule can protect your position if proceedings are ever started.
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