So, you’ve received a letter or been invited to a conversation marked as ‘without prejudice’. It is a common occurrence, especially regarding employment disputes in England & Wales. But what does ‘without prejudice’ actually mean for you? What do you need to do about it, and what are your options? This guide explores the topic and answers some of the most frequently asked questions that we receive here at Setfords.
- What does ‘without prejudice’ mean?
- I’ve received a without prejudice letter; what does this mean?
- Do all letters in settlement negotiations need to be marked as without prejudice?
- When can a without prejudice letter be used in court?
- What should I do if I receive a without prejudice letter?
- Can I accept the offer contained within it, or consider it further?
- What is a without prejudice conversation?
- When are without prejudice conversations used?
- Without prejudice or protected conversation: what’s the difference?
- Without prejudice conversations and settlement agreements
What does ‘without prejudice’ mean?
Simply put, the term ‘without prejudice’ means that it cannot be admitted as evidence before a court or employment tribunal.
In other words, they are trying to reach an agreement with another party. Labelling correspondence or a discussion ‘without prejudice’ prevents statements made in an attempt to settle disputes from being used as evidence against one party or the other. A letter or conversation can be marked as ‘without prejudice’ in various situations, commonly including employment disputes.
When a letter or conversion is marked as without prejudice, the contents cannot be used in any legal proceedings. It is confidential unless all involved parties have agreed otherwise. Even if the dispute is not settled, nothing in the letter or conversation can be used to ‘prejudice’ (i.e. undermine) either party’s position. There are some exceptions to this rule, including specific instances where parties may consent to highlight a without prejudice correspondence to a court or employment tribunal.
In short, the without prejudice rule exists so that parties can negotiate without undermining their original position or fearing that what they communicate may be later used against them in proceedings.
I’ve received a without prejudice letter; what does this mean?
It is relatively common to receive a letter marked ‘without prejudice’ regarding employment disputes. For example, this could be a conflict where an employee alleges discrimination from the employer or in settlement agreement negotiations.
If your employer wanted to make an offer of settlement to you in a letter, they would mark this letter as ‘without prejudice’. But what does this actually mean for you?
Upon being marked as without prejudice, the letter’s contents cannot be used as evidence in court by either party if negotiations were to break down and end up as a tribunal. This is because without prejudice letters typically contain admissions that could otherwise be used against the sender.
Do all letters in settlement negotiations need to be marked as without prejudice?
No. There is no need for all letters to be marked as without prejudice. For the mark to be used, the letter will usually contain a genuine settlement offer. This could be from the employer, or the employee responding to a settlement with a counter offer. Other letters or emails do not need to be marked as without prejudice; this is known as open correspondence.
When can a without prejudice letter be used in court?
It’s important to remember that just because a letter is marked as without prejudice does not always mean that it cannot be used in court. Typically, without prejudice letters can reserve the right to bring the letter to the tribunal’s attention in certain circumstances. The letter will usually identify the circumstance with the phrase ‘without prejudice save as to (the circumstance)’.
On the other hand, a letter may still be deemed inadmissible in court even if it is not marked as without prejudice. Some situations in which the without prejudice rule may not apply include:
- When the communication shows evidence of perjury, blackmail, or other forms of wrongdoing.
- When the court’s purpose is to decide whether an agreement has been made between the parties.
- When the communication shows evidence of fraud, misrepresentation, or undue influence, and one party is seeking to set aside the settlement because of this.
What should I do if I receive a without prejudice letter?
If you receive one of these letters, you may feel frustrated or confused. However, try to stay calm, as settlement agreements are a good way of terminating an employment contract or settling a dispute.
You want to put yourself in the best possible position, and a qualified lawyer will be able to help you with this. They will be able to advise you on the next steps, costs, and, if further negotiation is needed, whether you should respond, for example, with an open and/or without prejudice letter. They will also ensure that any settlement negotiations are fair and legal.
Can I accept the offer contained within it, or consider it further?
Under the ACAS guidelines, your employer should provide you with ten days to consider their offer. This provides you with reasonable time to seek legal guidance and instruct an adviser in the form of a qualified lawyer. It is a legal requirement that you are advised upon the terms of such agreement by a qualified lawyer, as the agreement will become legally binding once signed by all parties.
If your employer has not done so already, you will need to request that a copy of the formal settlement agreement be drafted and sent to you and your adviser.
Upon receiving the formal agreement, your adviser will book a consultation to advise you upon the agreement’s terms.
Typically, employers contribute towards your legal fee as settlement agreements also benefit them.
During your consultation, your adviser will work through the formal settlement agreement with you to ensure you are comfortable with the agreement’s contents. They will ensure that the contents are factually correct, reasonable and legal.
You will be pleased to know this process can be carried out remotely as there is no requirement to see your adviser face to face.
What is a without prejudice conversation?
Another common situation where the term ‘without prejudice’ is used is without prejudice conversations. A conversation can be deemed without prejudice when there is an existing dispute between the parties. As with letters, this can be any legal dispute. However, it is perhaps most commonly used in employment disputes. When a conversation is deemed to be without prejudice, the discussion cannot be used as evidence in court, similar to the contents of a without prejudice letter.
When are without prejudice conversations used?
In terms of an employment dispute, there are several situations in which an employee or employer may want a without prejudice conversation. For example:
- When there are grounds for a formal procedure such as disciplinary or redundancy processes, but one or both parties would rather come to a mutual agreement on the termination of employment.
- When the employment situation is not working out as either party had hoped, but there are no grounds for a formal procedure.
- When sensitive matters are to be discussed that one or both parties want to remain confidential and protected from being disclosed in court.
Before a without prejudice conversation occurs, the employer should inform the employee of what this means and ensure that they are happy to go ahead. If they are not satisfied, then all conversations should be open.
Without prejudice or protected conversation: what’s the difference?
These terms are commonly heard regarding employment disputes. They are sometimes used interchangeably, but there are differences between them, with protected conversations and pre-termination negotiations referring to the same scenarios. Below are some key facts about each type of conversation to help you distinguish between them:
Without prejudice conversations
- For a conversation to be without prejudice, there must be an existing dispute between the parties
- The contents of the discussion cannot be used in court, for example, in employment tribunal proceedings
Protected conversations and pre-termination negotiations
- Otherwise known as pre-termination negotiations and introduced in 2013, protected conversations can be held if there is no existing dispute between the parties. A settlement discussion can be brought up for the first time during these conversations.
- Their contents cannot be used in court. However, this does not cover claims of discrimination, breach of contract, health and safety matters, automatic unfair dismissal, or unlawful detriment.
- So, they can only be used as confidential conversations in straightforward and/or unfair dismissal cases. Otherwise, discussions may legally be brought up in court.
Without prejudice conversations and settlement agreements
Without prejudice conversations or letters are frequently used to negotiate exit packages for settlement agreements. If you have been given the offer of a settlement agreement through either a without prejudice letter or conversation, it’s crucial to speak to a solicitor before you accept. Please note it is a legal requirement for your settlement agreement to be looked over by a solicitor on your behalf! Your solicitor will advise you if the settlement is fair and help with any further negotiations if needed.
To get in touch with a solicitor to assist you with settlement agreements or any other aspect of employment law, please get in touch with Setfords today. Our experienced and professional solicitors are here to help you. Either give us a call on the number below or fill out the form, and one of our expert team will get back to you.