It has become almost commonplace in Western Australian business disputes for parties to attempt to resolve matters by writing letters marked “Without Prejudice”.
Many people believe that in a commercial dispute merely writing the words “Without Prejudice” on all letters means that those letters can not be used in any court proceedings.
That is wrong.
The important point to remember is that “Without Prejudice” communications are only protected in the sense that they can not be used as evidence when they are genuine communications designed to negotiation a settlement. Communications that are not sufficiently connected with an attempt to negotiation a settlement will not be protected even if the words “Without Prejudice” are used. Courts will look at the particular circumstances of the communication to determine whether it is sufficiently connected with an attempt to negotiate a settlement. Many Perth commercial litigation solicitors make it their common practice to mark all correspondence “without prejudice”. Unless a letter contains a settlement offer most Perth litigation solicitors know that it is unlikely the letter will be unable to be adduced in evidence.
A further matter to keep in mind is that it is only admissions made by parties during negotiations that are protected by the marking of letters “Without Prejudice”. So marking letters will not act to suppress evidence that are objective facts.
In the leading High Court decision on this issue a Plaintiff claiming damages against the Commissioner for Railways New South Wales for being thrown from a train stated during a “Without Prejudice” meeting that he had stepped out of the train while it was still moving. This statement of fact was admitted into evidence.
As a rule clients should not make any statements in letters that they are unwilling to have examined as evidence in a court case. Clients should take specific advice from Perth commercial litigation solicitors if they are under any doubt as to the meaning of the phrase “Without Prejudice”.
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