Law Articles

What is a without prejudice offer? 15/02/2024

A without prejudice offer can be used to resolve a legal dispute by enabling parties to make settlement offers without the risk of those offers being used against them in court. This protection encourages parties to engage in genuine negotiations to reach a settlement. Without prejudice offers can be made in writing, in person, or by telephone, and they are typically marked as "without prejudice" to clearly indicate their protected status. The without prejudice rule prevents these offers from being used as evidence in court proceedings, provided that the offer represents a genuine attempt at settlement. This allows parties to have open and frank discussions without the fear of their proposals being used against them in the litigation process.

In financial remedy proceedings, this means that the judge deciding the case at the final hearing should not be aware of the parties' without prejudice offers, so their decision cannot be potentially influenced by these offers.

However, there is an exception - if the term “without prejudice save as to costs” is used, it means that while the substantive discussions and offers made during negotiations are protected from being used in court, they can be considered by the court when considering legal costs at the end of the case. Making such offers can create additional pressure for parties to consider the potential costs implications of not accepting a reasonable settlement offer.

A further point to note is that a without prejudice offer can still be protected even if it is not explicitly marked as "without prejudice." The without prejudice rule applies to communications that are part of a genuine attempt to settle a dispute, whether they are explicitly labelled as such. The key is whether the communication is made in a genuine attempt to settle the dispute. If the communication is a bona fide attempt to reach a settlement, it will generally be protected by the without prejudice rule, regardless of whether it is explicitly marked as such.

If parties have provided sufficient financial disclosure, it is possible and advisable to make without prejudice offers with a view to reaching an out-of-court settlement in relation to division of matrimonial assets on divorce and dissolution. Without prejudice offers are commonly made during court proceedings on a voluntary basis, with a view to reaching agreement thereby ending the court proceedings. However, the court directs the parties to make without prejudice offers prior to the Financial Resolution Appointment in any event.

For further information and advice on this issue, and other family law issues, please contact us for a free initial consultation on 01992 306 616 or 0207 956 2740 or email us.