Without prejudice: meaning and how to use it

In UK employment law  “without prejudice” communications are used when employers and employees want to have “full and frank” conversations about settling claims without having the contents of those conversations used against them in a court or tribunal at a later date.

This guide explains what without prejudice means, when it is used, and how an employee can use without prejudice negotiations to their advantage.

What does without prejudice mean?

“Without prejudice” is a legal mechanism which limits who can see particular communications. For example, if your employer makes a genuine “without prejudice” offer to you in a letter then neither party will generally be able to show that letter to a court to try and prove their case. Without prejudice means, in general, that the contents of any communications sent by other party in a genuine attempt to try and settle a claim will not be admissible in a court or tribunal.

What is the purpose of a without prejudice communication?

It is a well-established (and useful) rule that operates in practice to allow parties to be full and frank in communications about a legal claim, with the principal aim of encouraging informed settlement of disputes. For example, an employer might admit in a without prejudice communication that it had failed to carry out certain procedures which might otherwise render a dismissal unfair, but the employee would normally not be able to show that admission to an Employment Tribunal to try and prove their claim. This is often termed “without prejudice protection”.

What are the requirements for a without prejudice communication?

The without prejudice rule will generally prevent statements made in a genuine attempt to settle an existing dispute, whether made in writing or orally, from being put before the court as evidence of admissions against the interest of the party that made them.

The requirements of a without prejudice communication are therefore:

1. That there is an existing dispute at the time of the communication;
2. A settlement offer is made;
3. This settlement offer is made in a genuine attempt to settle this dispute

Is there an existing dispute?

The issue will be decided on the facts of your particular case: is there, or was there, a dispute between you and your employer at the time the without prejudice offer was made? (for example, have you been threatened with disciplinary proceedings, submitted a grievance, or made a claim in the Employment Tribunal? If so, there is likely to be a dispute in existence).

Was a settlement offer made?

Again, this is a question of fact: has your employer made an offer of settlement to you? (for example, they could make an offer of a certain sum of money to you to settle claims that you are making, or that they think that you might make – this offer could be by email, by letter, or put verbally to you).

Was this settlement offer made in a genuine attempt to settle the dispute?

This is important: was the offer made as a genuine attempt to try and settle the dispute. Again, this is a question of fact: was the settlement offer one that might reasonably settle the dispute? A circumstance where a genuine offer to settle may not be made is where your employer does not offer you any ex-gratia compensation or makes an offer which is so low that you find insulting (for example, if you were offered £1 in settlement).

When would you use without prejudice?

You would normally send or receive a without prejudice communication where you want to make a settlement offer – this is generally the case when you wish to settle a dispute which has arisen in the course of your employment, whether this involves you leaving the business or not (it is perfectly possible to agree a settlement which does not involve you leaving a business although, in our experience, this is relatively uncommon).

Employers will quite often try to argue that communications that they have sent are without prejudice meaning that they can shield those communications from an Employment Tribunal. This is addressed in more detail below

How do you have a without prejudice conversation with your employer?

If you have a verbal discussion with your employer to discuss a settlement package then, when the conversation starts (whether the conversation is by telephone or face-to-face), state that you wish to have a “without prejudice conversation”. Once you have confirmed that the conversation is intended to be without prejudice then put forward the terms of the offer to your employer – they may have a response to the settlement offer in that conversation or, more likely, they will want to discuss it with the appropriate person within the organisation and come back to you.

If you put a written settlement offer forward then mark the communication (whether it is by email or by way of a letter) “without prejudice and subject to contract” and include the terms of the settlement offer that you wish to make.

It is normally a good idea, at the same time that you put your offer forwards or before you put your offer forwards, to submit a grievance setting out the factual background of your complaints (i.e. why there is a dispute between you and your employer), what your complaints are, and what you want your employer to do to resolve your complaints.

Further reading : what should a settlement agreement include?

What does subject to contract mean?

Subject to contract means that the heads of terms offered are, even if they are accepted, subject to the parties agreeing the appropriate contract terms (in this case, the terms of a settlement agreement ).

What can you expect to happen if there is a without prejudice conversation?

If you have a without prejudice conversation with your employer then you should expect the following:

• To put the terms of your offer forward
• To have some form of a discussion about whether your employer is even going to entertain those terms
• To have some form of a discussion about why you are making a without prejudice offer (you should also, as detailed above, either put forward why you think there is a dispute or have already done so)

Further reading: how much should an employee receive under a settlement agreement?

Can an employee make a without prejudice offer?

The answer to this question is “yes” – an employee can of course make a without prejudice offer. It is more common, however, for an employer to make a without prejudice offer first.

How an employer will normally make a without prejudice offer

Your employer will normally contact you (whether in writing or verbally) to state that they are making a “without prejudice” offer to you and to put the terms of the offer to you – this would normally include (among other things):

• Whether or not your employment will terminate under the terms of the offer and, if so, when
• How your notice period will be dealt with (i.e. whether you will work your notice period out, be put on garden leave, or be paid in lieu of notice)
• What settlement offer is being made to you (also referred to as an “ exit package “, “severance pay” or an “ex-gratia payment”

Quite often your employer will have a “without prejudice” (or “off the record”) meeting with you and explain the terms of the offer in the meeting; afterwards they will quite often send a without prejudice letter to you setting out the terms of the offer made and how long you have to consider the offer.

What you should do if you receive a without prejudice offer

If you receive a without prejudice offer then you should, generally, do the following:

1. Carefully consider the offer
2. Do your research on the offer: is it, objectively speaking, fair, and what is your view on it?
3. Take legal advice from a specialist employment lawyer
4. Respond to the offer within the deadline set by your employer (by sending back your own without prejudice letter)
5. If you’re not happy with the offer made by your employer, put a counter-offer forward

What is the difference between “without prejudice” and a “protected conversation”?

A “without prejudice” communication and a “protected conversation” are, essentially, the same thing: they allow the employer and employee to have ‘full and frank’ conversations which can’t, generally, be put before an Employment Tribunal or other court at a later date. There are, of course, exceptions to when a protected conversation or without prejudice communication is, as a matter of fact and law, actually have effect, but those circumstances are limited (we deal below with circumstances where a without prejudice communication might be admissible).

Further reading : read our guide on protected conversations

What is the difference between “open” and “without prejudice”?

“Open” and “without prejudice” is terminology that lawyers often use when negotiating settlements.

Open communications are, generally, admissible in the Employment Tribunal (or other court) (i.e. either party can seek to rely on them to prove their case or disprove the other party’s case).

Without prejudice communications are, generally, not admissible in the Employment Tribunal (or other court), as detailed above.

Can you try and argue that a communication is not without prejudice?

There are some circumstances in which there is an exception to the without prejudice rule (i.e. that the communications or correspondence which would otherwise be protected under the without prejudice rule can be rendered admissible in legal proceedings).

These exceptions apply in the following circumstances:

• Where there is not yet a dispute between the parties
• Where all parties agree to waive privilege
• Where there is ‘unambiguous impropriety’ by one or more parties

Unambiguous impropriety means, in general, some form of illegal activity or undue influence which would strip the cloak of inadmissibility away from the communications. If you wish to argue that your without prejudice communications with your employer are admissible then we would recommend that you speak to a specialist employment lawyer to take some advice ont his point.

What does without prejudice save as to costs mean?

Without prejudice save as to costs means that the contents of the relevant without prejudice communication (whether it is written correspondence (by telephone or by email) or a telephone conversation) cannot be admitted as evidence in a court or Employment Tribunal unless the relevant communication is being used to support or contest an application for costs.

Examples of litigation regarding without prejudice privilege

• Konczak v BAE Systems (Operations) Ltd UKEAT/0277/13/DA – in this case the Claimant inadvertently waived without prejudice privilege and rendered certain documents admissible in the ensuing Employment Tribunal litigation (our analysis of this case; the Employment Appeal Tribunal’s decision)
• Coles v. Elders’ Voice UKEAT/0251/19/VP – in this case the Employment Appeal Tribunal held that an Employment Tribunal erred in law by not inspecting “without prejudice” material when considering a question of misrepresentation and estoppel relating to a settlement agreement (our analysis of this case; the Employment Appeal Tribunal’s decision)
• Basra v BJSS Ltd [2017] UKEAT 0090/17/1912 – in this case the Employment Appeal Tribunal held that pre-termination negotiations were admissible when there was a dispute as to what the ‘effective date of termination’ was (our analysis of this case; the Employment Appeal Tribunal’s decision)

How can you learn more about what without prejudice means?

You can read more about settlement agreements using the links above, or you can read more about settlement agreements and without prejudice negotiations using the ACAS Guide on Settlement Agreements

If you wish to learn more about without prejudice letters or the without prejudice rule in general please contact our expert employment solicitors by calling 020 3397 3603.