“Without Prejudice”

‘Without Prejudice’ offers are a vital part of litigation in the Territory and indeed throughout most of the Common Law world. In Simaan General Contracting Co v Pilkington Glass Ltd [1987] 1 All ER 345, Judge John Newey QC at 347, dealing with the question of without prejudice communication, said:

It is public policy to encourage litigants to settle their differences and, since they are most unlikely to negotiate satisfactorily if every word which they utter and every offer which they make can be quoted against them later, the general rule has long been that nothing which is written or said ‘without prejudice’ can be referred to in Court subsequently without the consent of all parties concerned.

‘Without Prejudice’ is a form of privilege claimed to essentially allow practitioners to discuss issues openly and for those discussions, whether written or oral, to be considered ‘without prejudice to the maker of the statement’. The history of ‘Without Prejudice’ has interesting origins and seems to have originally been adopted on the basis that the evidence relating to these types of discussions or correspondence hold minimal evidential value rather then the current view relating largely to public policy.

It is unclear from my readings whether the principles of “Salvis Juribus” were common in the ancient world, but the principle of comments being considered ‘Without Prejudice’ certainly came into popular use following the reformation, essentially allowing the largely academic discussion of ideas which could be considered revolutionary or heretical without bringing the maker of the comments under the wrath of the Church or State.

‘Without Prejudice’ is provided for three-fold in the Territory. The common law protections which exist were essentially codified under s131(1) of the Evidence Act 2011, which states that any communication between any of the parties to a dispute that occurs during the negotiation, or any document prepared in connection with the negotiation cannot be adduced as evidence in Court. Additionally, r 1006 of the Courts Procedures Rules 2006 provides essentially the same protections but also more specifically rules out references to such material.

‘Without Prejudice’ refers to the privilege that attaches to written or verbal statements made by a party to a dispute in a genuine attempt to settle that dispute. However ‘Without Prejudice’ is not an indiscriminate shield that can be used to protect material that would otherwise be admissible, and documents which make a demand or seek to assert rights will not generally be covered by the privilege.

It is not vital to include the words ‘Without Prejudice’ to establish this privilege and the courts will consider the inferred intention of the parties as opposed to the actual use of the words. Conversely, the inclusion of the words when the material is not indeed covered by the privilege can incur an adverse costs order. However, to avoid a potential argument in respect of the use of a document in Court, it is still recommended to clearly state the basis on which the offer is made. Additionally it is not vital to include the words on all subsequent correspondence provided they are part of the same ‘chain of correspondence’…but just include it to be sure.

‘Without Prejudice’ will generally not apply to letters of demand, correspondence for the purpose of finalising an agreement that is not a settlement or when litigation is not contemplated or the mere assertion of rights.

The privilege can apply only to parts of documents that are actually privileged and for this reason it is best to keep correspondence relating to settlement separate from other topics to ensure that the correspondence as a whole can have privilege applied to it.

For a discussion of Calderbank offers and “Without Prejudice Save as to Costs” check out the posts relating to Calderbank offers.

For a recent Territory decision, see the Master’s recent discussion for hints at the Supreme Court’s stance: Greenway v Teoh [2014] ACTSC 224 or read the case note on this site.

Alternatively McNicol’s Law of Privilege (1992) (around p480) or for a bit more flair Desiatnik Legal Professional Privilege in Australia.