Without Prejudice

A particular feature in negotiations is the term ‘Without Prejudice’. This implies that the negotiations are being made on a ‘without prejudice’ basis. This term refers to the privilege that attaches to written or verbal statements made by a party to a dispute during a genuine attempt to settle that dispute.

Reaching a compromise in a dispute is encouraged, and as one may presume, in order to reach an agreement, there must be negotiations. One must appreciate the fact that for negotiations to be successful these have to be held in an open manner without concern as to whether what is being said may end up being used in court against the party in question. To this effect, the element of openness is promoted by the term ‘without prejudice’.

The Term

This term implies that the statements will generally not be admissible in Court as evidence against the person who made the statement.

It is a convenient short hand for ‘without prejudice to my/our rights’ and it is used in order to guard against any argument by those with whom an argument exists that a concession offered in negotiations constitutes a waiver of a right or an admission of liability, in any legal proceedings.

The protection conferred by the without prejudice principle means that parties to the without prejudice negotiations may not put in evidence in a dispute the content or detail, or the fact that an offer or concession has been made at all. However, for the protection of without prejudice to arise, there has to be some form of offer or negotiation content in the body of communication.

An out of court compromise/agreement is effective and in various occasions a time and cost effective solution. Article 1729 of our Civil Code notes that a compromise between the parties has the effect of a res judicata, and it cannot be set aside on the ground of an error of the law.

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