Without prejudice letters and conversations: what do they mean?

So, you’ve received a letter or been invited to a conversation marked as ‘without prejudice’. Employment disputes in England and Wales often involve the use of without prejudice letters and conversations. 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?

Simply put, the term ‘without prejudice’ means that the contents of the conversation or letter cannot be admitted as evidence in court or an employment tribunal.

Without prejudice is typically used when one party is trying to reach and agreement with another party. Labelling correspondence or a discussion ‘without prejudice’ prevents any statements that have been made in an attempt to settle disputes from being used as evidence against either party. 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 totally confidential, unless all of the 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 situations where parties might give consent to highlight without prejudice communications to a court or employment tribunal.

In short, the without prejudice rule exists so that people and organisations can negotiate without undermining their original position, or fearing that what they communicate may be later used against them in court proceedings or a tribunal.

I’ve received a without prejudice letter; what does this mean?

Without prejudice letters are commonly received during disputes, including employment disputes. For example, they can be used in a conflict where an employee alleges discrimination from the employer, or in settlement agreement negotiations, where an employer offers an employee a monetary settlement to prevent them from taking the employer to a tribunal.

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 at a tribunal. This is because without prejudice letters typically contain admissions that could otherwise be used against the sender, and they want to protect themselves from this.

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 genuine attempts to settle. 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; these are 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, even letters that aren’t marked as without prejudice van sometimes be deemed inadmissible in court. Some situations where the without prejudice rule might 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 is without prejudice save as to costs?

You may receive a letter that is marked as without prejudice save as to costs. This means that, while the contents of the letter are without prejudice and so cannot be admissible in court, the court can still use the contents only to consider who pays for legal costs in the case.

What should I do if I receive a without prejudice letter?

If you receive a without prejudice letter, you may feel confused. However, try to stay calm, as trying to settle out of court is 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 and with what. They will also ensure that any settlement negotiations are fair and legal.

Can I accept the offer of a settlement agreement in the letter, or consider it further?

If you’ve been offered a settlement agreement to end your employment in a without prejudice letter, 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 is drafted and sent to you and your lawyer. You will need to instruct a lawyer to review the agreement, which your employer should pay for.

Upon receiving the formal agreement, your lawyer will be able to advise you upon the agreement’s terms, whether they are factually correct, reasonable, and legal, and ensure that you are comfortable with them.

For more information, click here to visit our settlement agreements page.

What is a without prejudice conversation?

Another common situation where the term 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 there are sensitive matters to discuss 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 check 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, such as 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.

Please note that currently, employees must have two years of continuous service to qualify for protection from unfair dismissal, unless the dismissal is discriminatory. Under the Employment Rights Bill, this two-year qualifying period will be removed. It is anticipated that this change will take effect no earlier than 2026.

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. In fact, 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.