Any negotiations taken as part of an actual attempt to settle a claim are impliedly ‘without prejudice’. These negotiations are available at any stage of the litigation process. The main reason for a ‘without prejudice’ negotiation is that if and when the case goes to trial this offer cannot be used against him as evidence.
In order to clarify if a negotiation is ‘without prejudice’ it is normally stated on the letter or the parties are made aware if negotiations are taking place over telephone conversations or at a meeting.
Although it is good practice to incorporate such words on the correspondence, sometimes it may not. In the event that the words are absent it is important to establish that the letter was a genuine attempt to settle the case. If this becomes disputed then the courts will examine the documents and if the courts decide that it does not fulfil its purpose of making a genuine attempt to settle the case, even if it has the words ‘without prejudice’ it is not privileged.
If a party wishes to reserve the right to draw the courts attention to a ‘without prejudice’ offer to settle a case on the question of costs then he should mark the offer ‘without prejudice save as to costs’.
Thus letter and documents exchanged during the course of negotiations aimed at settling disputed matters will be labelled with the term ‘without prejudice’ with the objective that should negotiations fail, these documents may not be put in evidence at subsequent proceedings.