Without Prejudice: Meaning and How to Use it

Published : August 3, 2017

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

This guide explains what ‘without prejudice’ means and when it is used. It also examines how an employee can use ‘without prejudice’ negotiations to their advantage.

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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 usually 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 the other party in a genuine attempt to 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 rule that allows parties to be full and frank in communications about a legal claim, with the 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. However, in such circumstances, the employee wouldn’t normally be able to show that admission to a Tribunal. This is often referred to as “without prejudice protection”.

What are the Requirements For a Without Prejudice Communication?

The without prejudice rule generally prevents statements made in a genuine attempt to settle an existing dispute, whether 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:

That there is an existing dispute at the time of the communication;
A settlement offer is made;
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 of without prejudice correspondence? (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 you an offer of settlement? (for example, it could make an offer of a certain sum of money to you to settle claims that you are making, or that it thinks 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 to 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 it 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 argue that communications they have sent are without prejudice, meaning they can shield them 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 forward or before you put your offer forward, 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.

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)

Can an Employee Make a Without Prejudice Offer to Settle?

The answer to this question is “yes” – an employee can, of course, make a without prejudice offer to settle. It is, however, more common 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. It will 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 “severance pay”, an “ exit package “, 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 typically send a without prejudice letter setting out the terms and the period you have to consider.

What You Should Do if You Receive a Without Prejudice Offer

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

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

What is the Difference Between “Without Prejudice” and a “Protected Conversation”?

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

What is the Difference Between “Open” and “Without Prejudice”?

“Open” and “without prejudice” are terms lawyers often use when negotiating settlements.

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

Conversely, without prejudice communications aren’t generally admissible in the Employment Tribunal (or other court), as detailed above.

Can You Try to Argue That a Communication is Not Without Prejudice?

There are some circumstances in which there is an exception to the without prejudice rule. In such circumstances, the correspondence, which would otherwise be protected, 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 from the communications. If you wish to argue the admissibility of your without prejudice communications, seeking specialist employment advice is recommended.

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 the 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?

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

If you have any questions after receiving a without prejudice letter and want help, please contact Redmans Solicitors. Our expert employment solicitors are here to help. Following a brief consultation, we can assess your case, answer your questions and provide expert advice.

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