What is the purpose of including &quot;without prejudice&quot; in communications between parties?
<p>In communication between parties in legal matters, the phrase <em>without prejudice</em> is often included. I've also seen it used in the phrase <em>without prejudice, save as to costs</em>.</p>

<p>What is the purpose and legal effect of this?</p>

<p><em>Without prejudice</em> in a legal communication has a similar effect as <em>off the record</em> does in journalism. Without prejudice can be applied to any form of communication written or verbal; mediations, for example, are almost always conducted on a without prejudice basis.</p>

<p>The legal effect is that anything said or written in the communication is inadmissible in a court. A typical example is in a settlement offer: "We have your claim for $1,000,000 and we think its a load of c**p for reasons A, B &amp; C, however, without prejudice we offer the amount of $3.50 as full and final settlement of your claim. This offer remains open for 7 days." The party that receives such a letter can not use or rely on anything it says in legal proceedings.</p>

<p>It is a practical and invaluable method of allowing real negotiation and concessions to be made without the risk that these will be used against you if it all falls in a heap and you end up in court.</p>

<p><em>Without prejudice, save as to costs</em> has the same effect with the addition that you are specifically making a settlement offer (like my example above). If a matter is resolved by a trial the judge will award costs either against each one party or order that each party pays their own costs; in general, the costs "follow the event" i.e. the losing party usually gets stuck with the costs. If the "losing" party can show that they made a reasonable offer of settlement then they can apply to have the "winning" party pay their costs from that point on. For example see <a href="http://www.judcom.nsw.gov.au/publications/benchbks/civil/costs.html" rel="nofollow noreferrer">NSW Costs</a>.</p>

<p>Now, a document either is or is not <em>without prejudice</em> irrespective of if it carries the words or not - you can’t make a document that is not part or a bona fide negotiation <em>without prejudice</em> just by writing the words on it and one that is part of a negotiation is <em>without prejudice</em> even if it omits the words.</p>

<p>It means with out liability, or implying said, can not be used in court</p>

<p>The term is used to indicate that the correspondence is part of a settlement negotiation rather than just a letter about any other part of the case.</p>

<p>The reason for that is that settlement negotiations are supposed to be kept private, as the other answers have said. </p>

<p>The phrase is just meant to tip you off that the correspondence actually is a settlement negotiation to avoid confusion. </p>

legal-writing