Where negotiations are said to be 'without prejudice', it means that nothing that is said or done is normally admissible in evidence in any subsequent trial should the negotiations fail. The object of the exercise is to encourage parties to make genuine attempts to settle disputes, without fear of their discussions - and in particular their potential concessions - being subsequently disclosed in court.
There are two circumstances in which 'without prejudice' statements may be admissible in later court proceedings:
- where protection is waived with the express or implied consent of both parties, and
- where a settlement is reached following 'without prejudice' negotiations, but one of the parties subsequently fails to honour the terms of the settlement, and the matter therefore ends back in court. The negotiations would be admissible as evidence of the agreement.
