What Does ‘Without Prejudice’ Mean In Australian Law?

In Australian law, the term ‘without prejudice’ is a critical concept often used during negotiations to resolve disputes before they escalate to court. This legal principle allows parties to communicate freely, with the understanding that their words cannot be used against them in court as evidence if the negotiations fail and litigation ensues.

Unlike the commonly heard Miranda warning, “Anything you say can and will be used against you in a court of law,” invoking “without prejudice” allows parties to speak freely without fear that their words will later be turned against them in court if negotiations fail. But is it a catch-all shield for all communications to sidestep legal repercussions? Not exactly.

Read on to understand the ins and outs of ‘without prejudice’ statements in Australian law. If you find yourself involved in a commercial dispute and require more personalised advice than what’s covered here, don’t hesitate to contact our experienced dispute lawyers to request a free consultation.

What Is The Without Prejudice Law In Australia?

The “without prejudice” law in Australia gives legal privileges to a party to communicate freely without the fear of the statement being used in a law court. However, the phrase can’t be used on all occasions. 

A “without prejudice” communication, whether verbal or written, is mostly used when parties are discussing settlements or solving a dispute. 

According to NSW Law Access, a without prejudice statement isn’t intended to affect the rights of the involved parties. When the parties agree to a “without prejudice” communication, they can communicate freely about resolving the matter since neither can use the words in a court of law. 

How To Use ‘Without Prejudice’ In Australia 

In normal occurrences, communications are termed “open”, meaning that the words, whether oral or written, can be produced in a court of law. If that’s not the intention, the parties must clearly state that the communication is “without prejudice.” 

If you want your discussion or negotiation to be “without prejudice,” do the following: 

  • Written communication: Clearly write the term “without prejudice” at the top/start of the letter or other writings, indicating that the content can’t be produced in a law court.  
  • Verbal communication: State clearly your “without prejudice” intention before the start of the oral discussion or negotiation. 

However, simply stating “without prejudice” doesn’t give you legal privilege. The term only applies if the communication involves genuine negotiations for settlement or to resolve disputes out of the court. “Without prejudice” doesn’t apply in general conversations or contract negotiations. 

When Does Without Prejudice Not Apply?

As mentioned earlier, the “without prejudice” privilege doesn’t always apply. For example, if two parties agree on a settlement, but one revokes it, the other party can produce the “without prejudice” statement in a law court. The evidence would show that the parties actually came to an agreement. 

Other situations where without prejudice doesn’t apply in Australia include: 

  • When a party uses “without prejudice” to hide criminal activities or blackmail 
  • Verbal or written communication that contains misleading, dishonest, or illegal comments made during negotiations 
  • When the communication contains express terms advising that it shouldn’t be treated as confidential 
  • When the statement(s) is required to explain delays in proceedings 
  • To show proof of an estoppel.

Can You Make A Part Of A Communication To Be Without Prejudice? 

The simple answer is yes. You can label a section of your communication as “without prejudice”, leaving the rest open and admissible in a court. For example, your written document may be “open” but the section discussing the settlement is marked “without prejudice.”

However, this approach is risky since the other party might miss the “without prejudice” label and end up producing the entire statement in a law court. Also, if a document only contains a small “without prejudice” section, it might still end up in court, revealing even the protected phrases. 

Consult an experienced lawyer when dealing with such situations for professional legal advice. It’s also recommended to separate “open” and “without prejudice” communications to avoid confusion. 

What Does “Without Prejudice Save As To Costs” Mean In Australia?

The “without prejudice save as to costs” term means the communication will have “without prejudice” privileges until the courts make a ruling. After the judgment, the court determines the costs the offending party will pay. 

The court refers to the “without prejudice save as to costs” communication to determine the amount the offended party receives. It also considers whether the involved parties tried to make an out-of-court settlement and how they conducted themselves during the court processes. 

With the help of an experienced lawyer, a party can use the “without prejudice save as to costs” privilege to apply “legal” pressure on the offending party. The court checks whether the party used unreasonable actions during the negotiations to determine the amount to pay in costs. 

What To Do If You Receive A Without Prejudice Letter 

If you receive a letter bearing the term “without prejudice,” it means the other party seeks to keep the communication private and unusable in court. However, your response can be admissible in court if you respond incorrectly.

The best thing to do when you receive a “without prejudice” letter is to seek legal advice from an experienced lawyer. The lawyer will guide you on the best response to the letter. 

Contact Aditum Lawyers Today 

Do you have further questions about “without prejudice” privileges in Australia? Or, would you like legal assistance to resolve a dispute without the expensive and time-consuming court processes? 

Contact our team of professional dispute lawyers today for a free consultation. We’ve got the skills and experience to work on your case and get the best possible outcome. 

Resources & Further Reading 

  1. https://www.gotocourt.com.au/civil-law/estoppel/
  2. https://www.australiancontractlaw.info/law/terms#:~:text=Express%20terms%20are%20those%20terms,occasions%20it%20is%20less%20clear.
  3. https://www.legalaid.nsw.gov.au/my-problem-is-about/my-money/resolving-your-dispute#accordion-20154b8ad5-item-30c5c2dc32

Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as legal advice. Consult with a qualified commercial lawyer for personalised advice regarding your specific situation.