Without Prejudice Rule

What is a ‘without prejudice’ conversation? 

A ‘without prejudice’ conversation refers to communication or discussions or negotiations between parties that are involved in a dispute where they try to agree settlement terms and either avoid legal proceedings or settle existing proceedings, an example would be between an employer and employer in relation to a claim in the Employment Tribunal.  

Anything said or proposed in ‘without prejudice’ conversations (either in writing or orally) cannot then later be used as evidence against the other party before a court or tribunal. The reason for this is that the parties should be encouraged to have full and frank settlement discussions without the fear that any admissions or prejudicial comments which they might have made to try to settle the matter can be used against them in court or tribunal if the settlement discussions fail. 

‘Without prejudice’ conversations can occur in relation to all types of legal claim, and they are common in situations where the parties are discussing a termination of employment. 

Key points to note: 

• The protections available with “without prejudice” conversations will not apply where the parties are not yet in dispute. 

• The communication between the parties, whether orally or in writing, must be in a genuine attempt to settle a dispute. 

• Merely labelling a document “without prejudice” will not guarantee protection.  The key is whether the document is part of a genuine attempt to settle a dispute. 

• The protection is not absolute. There are limited exceptions which may result in a loss of protection, including fraud or “unambiguous impropriety”. See below section “Where can protection be lost: without prejudice and protected conversations” 

What does “in dispute” mean 

A key element for the conversation to be without prejudice is that the parties are in dispute.  There have been several legal cases about what “in dispute” means.  A tribunal has previously found that an employee’s grievance alleging bullying, harassment and maternity discrimination did constitute an existing dispute for the purposes of the without prejudice rule.  However, a grievance may not always be proof that there is a dispute between the parties.  Generally speaking, if legal proceedings have been threatened or brought in court or a tribunal there is likely to be a dispute. 

What are protected conversations? 

The law recognised that, particularly in an employment context, it may not always be the case that the parties are “in dispute” and therefore able to have a without prejudice conversation.  This was preventing employers and employees having frank, off the record conversations about parting ways on mutually agreeable terms.   

For this reason, section 111A of the Employment Rights Act 1996 was introduced to allow the employer and employee to have a discussion about ending the employment relationship on negotiated terms.   This is often referred to as a “protected conversation.” It means that the protected conversation cannot later be used as evidence that a subsequent decision to dismiss the employee was predetermined should negotiated terms not be reached and the employee then chooses to challenge the fairness of any later dismissal. 

The important limitation of protected conversations is it is only unfair dismissal proceedings where the fact and content of the protected conversation cannot be referred to.  This means that they can potentially be referred to in other claims such as discrimination or whistleblowing.  This is in contrast with without prejudice conversations where the contents are not disclosable in any legal proceedings.

Protected conversations and without prejudice conversations can happen at the same time 

Employers and employees wishing to have confidential discussions to end the employment relationship can and should use both the “protected conversations” and “without prejudice” rules.  The two are not mutually exclusive.  For this reason, it would be sensible to state that all negotiations and conversations are confidential and without prejudice and that the discussion is intended to also be covered under the protected conversation rules.  

What are the requirements for a conversation to be protected? 

The Acas Code practice on Settlement Agreements outlines some key considerations for protected conversations: 

• The agreement must eventually be put in writing. 

• Both parties should have a reasonable period to consider the proposal. (This is generally a minimum period of 10 calendar days) 

• It may be helpful to agree a time and place to discuss proposals in person. 

Where can protection be lost: without prejudice and protected conversations 

• For protected conversation to be kept confidential there must be no improper behaviour. This includes: 
  • All forms of harassment, bullying and intimidation, including using offensive words or aggressive behaviour. 
  • Physical assault or the threat of physical assault and other criminal behaviour. 
  • All forms of victimisation. 
  • Discrimination because of age, sex, race, disability, sexual orientation, religion or belief, transgender, pregnancy and maternity and marriage or civil partnership. 
  • Putting undue pressure on a party 

• For without prejudice conversations to be protected from disclosure (or kept off the record) there must be no perjury, blackmail or other “unambiguous impropriety”.  The above-mentioned examples for improper behaviour may be considered unambiguous impropriety.  What is clear from the courts is that this needs to be serious wrongdoing. 

What does ‘subject to contract’ mean? 

Where negotiations or offers are stated to be “subject to contract”, this means that any proposals will not be legally binding on the parties until a formal contract has been agreed and signed by the parties.  

Therefore, the parties can withdraw from the negotiations or change their offers without any legal consequences, unless and until a contract is signed.  

This advice applies in England, Wales and Scotland. If you live in another part of the UK, the law may differ. Please call our helpline for more details. If you are in Northern Ireland you can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.

If you have further questions and would like to contact our advice team please use our advice contact form below or call us.

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