“Without prejudice” is one of the most common tools used during negotiations and disputes between two parties. However, does considering “without prejudice” for negotiation and dispute have any adverse effect on your claim? Read on to find the right answer.
Solving disputes between two parties can be stressful and complicated. One of the major barriers to settling a dispute can be the hesitation of the disputing parties to speak freely and openly with each other. On the other end, negotiations generally require concessions and compromises. This means that both the parties can often feel a sense of paranoia that any statement made in the course of negotiations can turn to be a nightmare and haunt them later during court proceedings. The mere thought of being stuck with more court proceedings can stifle any productive discussion and result in both parties keeping their cards close to themselves.
This is where “without prejudice” comes into pictures, and may be important. If there seems to be any reluctance to talk to the opposite party, hiring dispute resolution lawyers can be a great choice.
What is “Without Prejudice” and What Does it Mean?
“Without prejudice” refers to the privilege attached to any written or verbal statements made by a party in an attempt to settle down the dispute. A written document or a verbal statement, made without prejudice cannot be impelled enough to produce any evidence or could be referred to in court proceedings. Making documents, verbal statements, and correspondence “without prejudice” allows both the parties to work towards a compromise without being sceptical that their statements or documents may be used against them later if negotiations fail. In this scenario, all the discussions are confidential and cannot be shown to the court or any other party, that is unless all parties involved in the communication have agreed to. “Without prejudice” has become quite a common practice among some practitioners and lawyers. To qualify for “without prejudice” privilege, there are a few more things required than simply printing words on documents. However, one needs to be extremely careful while writing the protection and ensure it is appropriate.
Sometimes, parties choose to negotiate openly, but not confidentially. In this case, any related notes, documents and correspondence will be disclosable to the court and other parties. In short, you can say that “without prejudice” is possessed of some virtually magical qualities and anything said or done during the timeframe will be hidden from the prying eyes of a court.
When Does it Apply?
There are several restrictions as to where and when the “without prejudice” protection can be applied. A without prejudice protection will not help you protect a document or statement made in the course of negotiations that are impertinent to dispute resolution. The matter is a said principle of common law which is specifically expressed in section 67C of the Evidence Act 1929 (South Australia). The protection privilege will only apply to parties who are more than engaging in genuine settlement negotiations in an attempt to settle any legal proceedings that have commenced. Simply involving in commercial negotiations will not attract without prejudice protection. To determine whether or not the prejudice can be utilized, the court will look at the situation surrounding each communication. Based on the evaluation, they assess whether the parties are intended to negotiate and resolve their dispute to settle.
People often misunderstand the basic principle which has led to the misuse of the term. People will mistakenly put “without prejudice” on the following:
- The correspondence which is unrelated to settling a dispute
- Letters of Demand where they are not making any amendment, or adjustments, or discounting the amount they are demanding
- Correspondence where they are only trying to finalize the terms of an agreement
“Without prejudice” privilege is an important tool in early dispute resolution. By hiring mediation lawyers, parties can have an open and frank legal negotiation. However, sometimes “without prejudice” labels can lead to several complications, legal arguments, and potential cost implications if misused. Our dispute resolution lawyers can help you arrange a mediation meeting and will discuss and frame all the aspects of mediation on your behalf keeping your merits in front. We also have a set of skilled, experienced professional property lawyers who can help you with property-related matters.
To create a case-winning strategy based on your needs and budget, contact us today!