Posts Tagged ‘negotiations’

Without Prejudice – What is the effect of this term?

In negotiations letters and other documents are often exchanged marked “without prejudice.  What does the term “without prejudice” mean, and what is the term’s effect in legal matters in British Columbia. This blog considers this.

The law is evolving and changing, and the exact application of this term or any other legal concept should be reviewed by a lawyer before it is applied to a particular circumstance.

A review of the definition of the term can be found this legal dictionary. In British Columbia, the term was reviewed in the case of Coombs v. LeBlond Estate.

In BC, as in most jurisdictions, the purpose of without prejudice communications, whether they be by discussions, in writing or in some other form, is to allow open discussion of settlement negotiations. If the matter proceeds to a hearing or adjudication, one or both parties don’t want the someone to say “I told the other side this is what they should agree to and they turned it down”.

Very often, discussions or letters marked “without prejudice” do not contain a settlement proposal.   Even if such a communication is marked “without prejudice”, it still may be admissible in court or another forum against the party who wrote it, or had their lawyer or representative write it.

Sometimes discussions or letters not marked “without prejudice” may be seen as seen as privileged and not usable if it contains terms of settlement.

After reviewing the relevant cases, the judge In the Coombs case, at paragraph 23, finds that in order for a communication to be without prejudice, such that it cannot be used in court or against the parties, the communication must have the following two conditions:

1 – a dispute or negotiation between two or more parties; and,
2 – terms of settlement offered.

With respect to the first term, some dispute must exist. There does not need to be court proceedings, but there should be grounds to commence a court proceeding.

With respect to the second term, there must be some terms of settlement offered. The other content of the communication can be the basis of the terms, or an explanation as to who the facts are seen or perceived.

If terms of settlement are missing from the communication, then it might be possible to use the communication against or for one of the parties.