Author: Bellina Barrow
Date: 09 June 2025
Introduction
The “without prejudice” rule is a cornerstone of legal negotiations. It ensures that parties can engage in settlement discussions without fear of their statements being used against them in court. Despite its long-standing application, it is often overlooked or misunderstood, leading to unintended legal consequences.
“Without Prejudice”?
The “without prejudice” rule prevents a party from using their statements, as well as those of their opponents, in evidence, since said rule is predicated on the fact that communication was made with a view to settlement.
The principle hinges on the nature and purpose of communication between parties. If discussions are genuinely aimed at settlement, they are protected under the without prejudice rule (Rush & Tompkins Ltd v Greater London Council and Another (1988) 3 All ER 737; Cheddar Valley Engineering Ltd v Chaddlewood Homes Ltd (1992) 4 All ER 942).
Statements made “without prejudice” may not be relied upon as admissions due to their lack of probative value, as these statements are made, in most circumstances, to reach a compromise position and are not an assertion of factual truth (J.H. Wigmore, Evidence (Chadbourne rev edn, 1976), vol.4, para. 1061 and Vaver, “Without Prejudice Communications-Their Admissibility and Effect” 1974 9 UBC LR 85 at 101).
A party should not unilaterally waive the “without prejudice rule” without first seeking and obtaining the consent of the other party, or this would erode the fundamental objectives which the “without prejudice” rule seeks to achieve (Walker v Wilsher (1889) 23 QBD 335).
Two Justifications for the Rule
- The public policy of encouraging parties to negotiate and settle disputes out of court (UYB Ltd v British Railways Board (2000) The Times 15)
- fostering, facilitating, and protecting an implied agreement arising out of the consequences of offering or agreeing to negotiate without prejudice (Cutts v Head), per Hoffman L.J..
Key Aspects of the Rule
- It prevents parties from using settlement discussions as evidence.
- It applies to communications obtained from third parties for settlement purposes.
- In the event of unsuccessful negotiations, “without prejudice” communication is not to be referred to at a subsequent trial (Rush & Tompkins Ltd v Greater London Council and Another).
- It remains in effect even after litigation concludes (A. Zuckerman, ‘Zuckerman on Civil Procedure Principles of Practice’ (Sweet & Maxwell) (2006), 2nd Edition, p.p. 659, para 16.2).
- Letters in a chain of correspondence are protected by the shield of “without prejudice”, as a letter marked “without prejudice” protects subsequent and previous letters in the same chain of correspondence (Oliver v Nautilus Steam Shipping Co. Ltd [1903] 2 K.B. 639, CA)
Exceptions to the “Without Prejudice” Rule
While the rule is widely applicable, certain exceptions allow privileged communications to be disclosed:
- A settlement agreement is arrived at by the parties (Trinidad & Tobago Consolidated Civil Proceedings Rules 2016 (as amended), Practice Direction 4.8 on Pre-Action Protocols dated 15th November 2005 & Tomlin v Standard Telephones and Cables Ltd)
- There is consent of the other party to the revelation and/or reference to the privileged document (Rabin v Mendoza and Co. (1954) 1 WLR 271 & Walker v Wilsher)
- There is a waiver by one of the parties of the “without prejudice’ rule
- There are instances of perjury, fraud, threat or impropriety and the exclusion of the privileged communication would foster or aid said perjury, threat, fraud or impropriety (Section 52 (8) of the Trinidad & Tobago Proceeds of Crime Act; Watt v Watt (1905) AC 115 & Forster v Friedland (1992) CA Transcript 1052)
- There is proof of bankruptcy or an inability to pay by one of the parties (Re Daintrey ex p Holt (1893) 2 Q.B. 116)
- There is a delay, to explain said delay or to indicate a party’s acquiescence to the same (Walker v Wilsher)
- There is a need to refer to the privileged communication to establish reasonable conduct in the settlement negotiations.
When “without prejudice” communication falls within one of the exceptions, the parties are not freed from the “without prejudice” rule as they are restrained from using the privileged communication for the exception only (A. Zuckerman, ‘Zuckerman on Civil Procedure Principles of Practice’ (Sweet & Maxwell) (2006). 2nd Edition. p.p. 659. para 16.20).
The law places the burden on the person who claims to be able to sever “without prejudice” negotiations to establish that an agreement was reached between the parties and to clearly communicate the change of the status of the negotiations, from “without prejudice” to open negotiations, to the other party to the negotiations.
Judicial Enforcement of the Rule
It is impermissible at common law and according to the Trinidad & Tobago Civil Proceeding Rules 2016 (as amended) to set out in a Claimant’s Statement of Case a settlement offer of the Defendant and further to mark and exhibit said correspondence to a Claimant’s Statement of Case (per Harris J in CV2013-01580 Heeralal v Subnaik; Subnaik & Maritime General Insurance Company Limited at para. 8). This emphasises that courts strictly enforce the without prejudice principle, to ensure that parties cannot unilaterally waive its protections.
Judges may review privileged documents to determine whether the rule was breached. For example, in Heeralal v Subnaik & Ors, the Judge was entitled to look at the privileged document, or part thereof, in order to determine whether the ”without prejudice” rule was applicable and/or breached.
Consequences of Breaching the Rule
The consequences differ depending on inter alia the circumstances of the case and the stage of proceedings in the litigation process. For example, in the case of Heeralal v Subnaik & Ors, the infringing paragraph of the Statement of Case of the party who had breached the “without prejudice” principle was struck out by the learned Judge.
Conclusion
The without prejudice rule remains a fundamental safeguard in legal negotiations to ensure that parties can engage in settlement discussions freely. While exceptions exist, strict adherence to the rule is essential in maintaining legal integrity and encouraging fair resolutions. Understanding the without prejudice rule and when to deploy it in legal negotiations is crucial for effective negotiations and dispute resolution.