If your employer has sent you a letter or email marked ‘without prejudice’, or used those words in a conversation about leaving your job, you may be wondering what it actually means and whether it matters. This guide explains the without prejudice rule in plain English — what it does, when it applies, and when it can be lost.
What Does ‘Without Prejudice’ Mean?
The legal term ‘without prejudice’ means that a written or verbal communication cannot be used as evidence in legal proceedings when it is a genuine attempt to resolve an existing legal dispute.
The courts developed the without prejudice rule to allow parties to try to settle disputes without fear that those attempts will be used against them if the matter later goes to court or tribunal. The underlying principle is one of public policy: it is generally in everyone’s interests for disputes to be resolved by agreement rather than litigation, and the rule encourages that by giving both sides the freedom to negotiate openly.
Does the Label ‘Without Prejudice’ Automatically Apply?
Contrary to what some assume, it is not enough simply to write the words ‘without prejudice’ at the top of a letter or email. The protection only applies when two conditions are met:
- There must be an existing dispute. In this context, an existing dispute means actual or contemplated legal proceedings — for example, a claim in the employment tribunal. A grievance submitted through an employer’s internal procedure does not automatically or necessarily constitute an existing dispute for these purposes.
- The communication must be a genuine attempt to resolve that dispute. A letter that merely threatens, informs, or instructs — without any element of negotiation or compromise — is unlikely to attract without prejudice protection, regardless of how it is labelled.
Equally, a communication that meets both conditions may attract without prejudice protection even if it is not labelled as such. The label is a useful signpost, but it is the substance that determines whether protection applies.
What Does ‘Without Prejudice’ Mean in Practice?
In the context of a settlement agreement, you will typically encounter the words ‘without prejudice’ in one of two ways:
- In correspondence. Your employer’s solicitors may send a letter or email marked ‘without prejudice’ making an offer of settlement. This means that if you reject the offer and the matter proceeds to tribunal, neither side can refer to the letter or its contents as evidence.
- In conversation. Your employer may raise the possibility of a settlement in a meeting or phone call on a without prejudice basis. The same principle applies: what is said in that conversation cannot generally be used in subsequent proceedings.
You may also encounter the phrase ‘without prejudice save as to costs’. This is a variation used in formal settlement offers where the communication remains inadmissible on the main issues but can be referred to by a court when deciding who should pay the costs of the proceedings (if anyone).
When Can Without Prejudice Protection Be Lost?
The courts have developed exceptions to the rule to prevent its abuse. Without prejudice protection can be lost — and the communication become admissible — where it amounts to what the courts call ‘unambiguous impropriety’.
The principle was stated clearly in Unilever PLC v Procter & Gamble Co [1999] EWCA Civ 3027: without prejudice protection cannot “act as a cloak for perjury, blackmail or other unambiguous impropriety”. In such cases, the public interest in disclosing the improper behaviour outweighs the usual public interest in maintaining the privilege.
What counts as unambiguous impropriety?
Examples of conduct that has been found to amount to unambiguous impropriety include:
- Perjury — stating an intention to lie on oath
- Blackmail — using threats to extract money or concessions to which the threatening party has no legitimate entitlement
- Fraud or dishonesty
- Using threats of criminal or regulatory proceedings as a lever to pressurise the other party into settling a civil dispute
- Unfounded allegations of serious misconduct with potential criminal or regulatory consequences
The threshold is very high
The courts have consistently emphasised that the bar for establishing unambiguous impropriety is extremely high. In Motorola Solutions Inc v Hytera Communications Corp Ltd [2021] EWCA Civ 11 WLR 679, Lord Justice Males stated that the without prejudice rule must be “scrupulously and jealously protected” and that “cases in which [the unambiguous impropriety exception] has been applied have been truly exceptional” [Para. 31]. He added:
“The policy choice is that the public interest in the settlement of litigation generally outweighs the risk of abuse of the privilege in individual cases.” [Para 62]
To be ‘unambiguous’, the impropriety must be completely clear — not merely arguable or probable. The evidence must show clearly that the without prejudice rule is being abused. A court will not remove protection simply because one party has exaggerated their position, behaved unreasonably, or applied pressure to settle.
Swiss Re Corporate Solutions Ltd v Sommer [2022] EAT 78
A recent illustration of how the courts apply this test is Swiss Re Corporate Solutions Ltd v Sommer [2022] EAT 78. In that case, the employer’s solicitors sent Mrs Sommer a without prejudice letter making a settlement offer of £37,000, alongside allegations that she had committed serious misconduct, potential criminal offences under the Data Protection Act 2018, and breaches of FCA conduct rules — allegations that the Employment Judge found to be “grossly exaggerated”.
The Employment Judge found that the letter amounted to unambiguous impropriety and ruled it admissible. The Employment Appeal Tribunal, however, allowed the employer’s appeal and restored the without prejudice protection. Mr Justice Bourne held that while the Employment Judge may have been right to describe the framing of the allegations as grossly exaggerated, exaggeration alone — without findings as to the sender’s dishonest state of mind — was insufficient to cross the high threshold required. The letter therefore remained inadmissible.
The case illustrates both the width of the protection and its limits. As the EAT acknowledged, the employer “sailed close to the wind” — but the strong public policy in favour of protecting settlement negotiations meant the communication retained its privileged status.
Key Takeaways
- Without prejudice protection applies to genuine attempts to resolve an existing legal dispute — the label alone is not enough
- Communications that meet the conditions are protected whether or not they are labelled ‘without prejudice’
- Protection can be lost where a communication amounts to ‘unambiguous impropriety’ — but the threshold is very high
- Perjury, blackmail, fraud and using threats of criminal proceedings as a lever in civil negotiations are examples of conduct that can strip the protection
- Exaggeration, unreasonableness and applying pressure to settle are not, by themselves, sufficient to remove protection
- Courts will only strip the protection in truly exceptional and clear-cut cases
Without Prejudice and Protected Conversations
The without prejudice rule is sometimes confused with the related concept of a ‘protected conversation’ under section 111A of the Employment Rights Act 1996. While both allow employers to raise the possibility of a settlement without that being used against them, they operate differently and have different scope. Protected conversations are covered in a separate guide on this site.
Received a without prejudice offer? Understanding what you can and cannot do with it is just the starting point. Read our guides on how to negotiate a better settlement agreement and how much your settlement agreement should pay you for practical guidance on your next steps.
Legal Disclaimer:
This article is for general information purposes only and does not amount to (nor is it intended to be) legal, tax or financial advice or a complete or authoritative statement of the law nor should they be treated as such. No warranty or promise is given, express or implied, as to accuracy of the information on this page and no liability is accepted for any error or omission. You should instruct a specialist employment solicitor to advise you on your particular situation and not act or rely on the information on this page.