Category: Claims handling · Reviewed by Amy Price, Account Executive · Last reviewed 2026-06-11
Without prejudice negotiation is communication between disputing parties (or their lawyers) made for the purpose of settling the dispute, protected by a common-law privilege that prevents the communication being adduced in evidence at trial.
The without prejudice rule allows parties to negotiate freely, exploring concessions and offers, without fear that what they say will be used against them at trial if the negotiation fails. It is one of the foundational doctrines of English settlement practice. Almost every commercial settlement in England is reached after some form of without prejudice negotiation.
The rule applies to all communications made with the genuine intention of settlement, whether or not expressly labelled “without prejudice”. The label is the conventional flag; the substance is what matters. The rule extends to written and oral communications, to formal mediation discussions and to informal solicitors’ calls.
The without prejudice rule is judge-made law. The leading authorities are:
The rule is also reflected in CPR 36.16, which provides that the fact and content of Part 36 offers are not admissible in evidence until liability has been determined.
The rule sits alongside (but is distinct from) legal advice privilege and litigation privilege. Without prejudice protects communications between adversaries; the other privileges protect communications within a party-lawyer relationship.
Without prejudice negotiation can be initiated by either party at any stage of a dispute, before or after issue of proceedings. The communications are typically marked “without prejudice” or “without prejudice save as to costs” (the latter preserving the right to refer to the negotiation on the question of costs after trial).
The protection extends to:
The protection survives the proceedings. Even if the case is dismissed and a new claim is brought, the without prejudice communications from the earlier case remain protected from disclosure in the new one.
The Unilever exceptions are narrow. A party seeking to adduce without prejudice material must show that the case falls within an established exception:
Operationally, without prejudice negotiation is an art form. Skilled negotiators use the privilege to explore positions without commitment, to make conditional concessions, to test the other side’s bottom line. Less skilled negotiators sometimes give away too much in without prejudice settings on the mistaken assumption that the protection is absolute.
The without prejudice protection does not prevent the negotiating party from telling its own client (the policyholder, the in-house team, the board) about the negotiation. It only prevents the negotiation being adduced as evidence against the negotiating party at trial.
“Without prejudice save as to costs” (also known as a Calderbank offer) preserves the right to disclose the offer on costs after the substantive issue is decided. This is the standard formula for offers that are intended to engage costs consequences if rejected.
“Privileged and confidential” added to without prejudice communications reinforces but does not extend the protection.
“Hypothetical” or “for discussion purposes only” labels are sometimes used to emphasise that the writer is exploring positions rather than making firm offers. The protection is no greater than ordinary without prejudice.
“Mediation privilege” is a related but distinct protection that extends to communications made during mediation under a mediation agreement. The exact scope of mediation privilege as a separate doctrine is contested; most practitioners proceed on the basis that mediation communications are protected by a combination of without prejudice, mediation agreement confidentiality and judicial reluctance to admit mediation material.
A defence solicitor and a claimant solicitor exchange a series of without prejudice letters over six weeks attempting to narrow the gap on a £900,000 PI claim. The claimant’s opening position was £1.1m; the defence’s was £200,000. Through the without prejudice exchange the gap narrows to £620,000 (claimant) and £450,000 (defence). The defence then makes a Part 36 offer (which is, by CPR 36.16, separately protected) at £550,000. The claimant accepts. The without prejudice exchange falls away; the Part 36 acceptance is the operative event. If the matter had gone to trial and the claimant had recovered £700,000, the defence could have referred to the Part 36 offer on costs (the offer was beaten) but could not have adduced the earlier without prejudice exchanges (those remained privileged). The without prejudice material would only have come back into the picture if one of the Unilever exceptions had applied — for example, if there had been a dispute about whether the £550,000 Part 36 offer was made or accepted.
By Matt Bartlett, Director, on 2026-06-11. Next review: 2026-12-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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