Real Estate Tip of the Week: With or Without Prejudice

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Real Estate Tip of the Week: With or Without Prejudice

Published 13 May 2019

Written and oral statements marked as ‘without prejudice’ and made in a genuine attempt to settle an existing dispute are prevented from being admitted as evidence in court.

Given that litigation is always a time consuming and costly option, the without prejudice rule is a means of encouraging parties to settle disputes out of court, comforted in the knowledge that what they say, and any admissions made to settle the matter, cannot be used against them if the settlement discussions fail.

An example scenario:

  • Party A issues Party B with a schedule of dilapidations.
  • Party B disputes the schedule.
  • Party A and Party B enter into settlement negotiations.
  • Party A communicates that they would be willing to accept a set amount to cover the costs of repairs and has marked this communication as ‘without prejudice save as to costs’.
  • Party B refuses to settle and the matter goes to court.
  • Party A can still sue for the full amount and nothing said in the without prejudice correspondence can be used by either party until the case has been decided.
  • After the case is decided then the parties can use 'without prejudice save as to costs’ correspondence to argue who should be responsible for the costs of the proceedings.

Therefore always ensure any attempts to settle a case, including anything which you would not want a judge to see until the case has been decided, is marked without prejudice. If you are having verbal discussions then it is worth sending an email to the other party confirming that the discussions are without prejudice, so there is a paper trail to prove that was the intention.

Whilst there are limits to what they can be used to protect (for instance it cannot be used as “a cloak for perjury, blackmail or other ‘unambiguous impropriety’”), without prejudice correspondence and discussions can be a very positive way to help settle disputes.

Authors

Sakis Tombolis

Sakis Tombolis

London - Walbrook

+44 (0)20 7894 6682

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