Use the phrase “without prejudice” only when commenting, communicating or responding to a settlement proposal or offer, otherwise you may be led to believe that your communication is “unofficial”, although it may well be part of the eventual record. In Ramos v. Hewlett-Packard, the tribunal found that the employer`s severance pay was paid without prejudice on the basis of the following: Confidential interactions (written and oral) between parties genuinely attempting to resolve a dispute are often marked as “without prejudice” (WP). It is practically an abbreviation for saying: “While I am trying to reach an agreement with you, I am not admitting any part of the case or admitting any arguments or rights – so my offers to enter into a trade deal are without prejudice to my main position that I am right and you are wrong. Essentially, “without prejudice” is an invitation not to use the concession or information prejudicial to the author against the author. Conversely, it should not be used to portray the perpetrator positively before judgment. In short, you shouldn`t say something is “without prejudice” if you want to rely on it in court or any other type of court case. As a basic guideline, this means that you should not use the phrase in a communication that is not part of a comparative discussion or comparison. The finding that a communication has been made without prejudice has important consequences in judicial proceedings. As mentioned above, such a finding precludes any reference to impartial communication, whether it is a contractual dispute, employment matter or any other claim. Emails, letters, notes, discussions, phone calls – regardless of the form of communication – cannot be mentioned in court. However, there may be many occasions when one party wants to be able to disclose its communications with the other party in the pleadings, evidence and arguments of a case.
A well-thought-out communication, claim, reservation of rights or other statement may be a key part of one party`s strategy in dealing with the other party. However, if the communication is marked as impartial, such strategic positioning is not available for disclosure in the courtroom. Keep in mind, however, that forgetting to put the WP label can lead to a costly dispute over the true basis of communication (WP or “open”), especially if an attitude favors a particular party. It is best to avoid this by obtaining confirmation from the other party that they agree that the communication is without prejudice. “Without prejudice” is a legal term that essentially means “without loss of rights”. It is a statement by a party that what it says, does or accepts is not intended to affect its full statutory rights later if it chooses to emphasize this point. The WP rule is to encourage settlement talks without the parties weakening their position in the formal dispute. Basically, when this rule applies, people can speak and write openly without fear that what they say could be used against them in court or arbitration. With the exception of the Sixth Circuit, U.S. courts have refused to recognize a broad settlement privilege because Congress and many state lawmakers have already raised the issue — and have not created privileges. The primary authorities for settlement communications are Federal Rule of Evidence 408 and parallel rules of evidence issued by many states.19 Rule 408 and its constitutional equivalents do not create privilege or engage in preliminary inquiries.
Rather, they provide that proof of an offer or acceptance of consideration for payment is not admissible in the settlement of a disputed claim to prove or refute the validity or amount of the claim.20 Rule 408 therefore excludes only the use of settlement notices for specific purposes at trial. In addition, paragraph 408(b) of the Regulations mentions numerous exceptions that allow settlement communications to be admitted “for other purposes, such as proving bias or prejudice on the part of a witness, denying an allegation of undue delay, or proving an attempt to obstruct a criminal investigation or prosecution.” 21 The reference “Without prejudice” may be used in an offer of preliminary settlement, but if the matter is brought before the courts, it may not be used to influence the proceedings. The reason why the courts prohibit any disclosure of communications without prejudice is that these communications are subject to the so-called “settlement privilege”. As recently stated by the Supreme Court of Canada in Sable Off-Shore Energy Inc. v. Ameron International Corp., 2013 SCC 37 (CanLII), there is an overriding public interest in parties resolving their disputes without the personal, public and temporal time associated with litigation that burdens our already overburdened court system. The Court has held that the protection of the settlement privilege helps parties resolve their differences because parties are more likely to settle if they know from the outset that their negotiations will not be disclosed. If a document is marked “without prejudice” or an oral communication is made “without prejudice”, that document or statement is generally inadmissible in any subsequent judicial, arbitral or adjudicative proceedings.
The rationale for this legal principle stems from the public interest associated with encouraging parties to resolve their own disputes without going to court, which is particularly encouraging for judges and arbitrators in the context of construction. The use of the term and its legal meaning allows the parties to conduct free and open settlement discussions and propose compromises for their positions, and then subsequently reject if no satisfactory agreement can be reached and a formal settlement of disputes becomes necessary. Too often, the term “unbiased” is misused — even by lawyers — probably because people tend to believe that there is some kind of magic associated with the expression. This concern is poetically summed up in a 1975 Australian court decision in Davies v Nyland: “. In some circles of the community, there is a belief, almost a superstitious obsession, that the expression “unprejudiced” has practically magical properties and that everything done or said under its purported aegis is forever hidden from the prying eyes of a court. It should also be kept in mind that marking a document as WP is different from “without prejudice except cost” (“WPSTC”). The latter means that WP protection applies until a court makes a decision. In such cases, if the dispute is not resolved, reference may be made to the interaction in the delivery of the judgment and the court will consider claims for reimbursement of costs.
During this time, the documents would be used to illustrate whether a party acted reasonably in attempting to resolve the dispute. While there are no guaranteed results for costs, the tribunal may weigh efforts to resolve a dispute at the cost review stage.
