Without Prejudice Settlement Agreements and Letters

Without Prejudice Settlement Agreements and Letters

If you have a document marked ‘without prejudice settlement agreement’ then you are probably an employee wishing to resolve your workplace dispute or negotiation in the context of UK employment law. Without prejudice settlement agreements are marked as such for important reasons which we will explain below.

Maybe you wish to negotiate with your employer about how much you should get in your settlement agreement for leaving your job quietly. If you just want to find out how much your settlement agreement case could be worth, try our free Settlement Agreements Calculator.

Writing a letter or document

Top 3 TIPS

  1. Without Prejudice is a legal term meaning “this can’t be shown to a judge”
  2. Without prejudice negotiations should be conducted in parallel to your ‘open’ correspondence
  3. Without prejudice letters can be found on our Legal Templates page

When writing a without prejudice letter it is often helpful to set out the strongest points of the case. Then you should give an estimate of the legal fees which the other side would spend fighting it, and an estimate of the amount of compensation which they would have to pay you if they lose (and a realistic breakdown of that estimate). Then you can set out your discounted amount which you would accept to settle the case by way of a settlement agreement, and put a deadline for acceptance of, say, 7 days.

Without prejudice – what does it mean?

Without prejudice is an old legal term which means ‘this cannot be mentioned to a judge.’ So, when the without prejudice doctrine applies, that particular email, settlement agreement, or conversation which is ‘without prejudice’ is something which the two parties in the employment dispute (you and your employer) have to keep off the record, so that if the case goes to tribunal, that item cannot be brought to the attention of the tribunal. For example, if your unfair dismissal claim is for £10,000.00, you could make a without prejudice offer to accept £7,500.00.

How is without prejudice implemented in practice?

There are 2 elements to making a communication or settlement agreement document ‘without prejudice’. Firstly, it needs to be clearly marked with the word ‘without prejudice’, or if it is a verbal conversation then you need to say ‘do you mind if we speak without prejudice’. Secondly, there needs to be a genuine attempt to settle the case out of court, for example an offer of an amount of money to settle.  It is not enough to just talk about the merits case and say the words ‘without prejudice’.

Why does the doctrine of without prejudice exist?

Without prejudice was introduced into English law to facilitate out of court settlement agreements, and therefore save tax payers’ money by cutting down on the amount of cases which end up in court. Because everyone knows that you can’t use without prejudice offers as evidence of guilt in court, people feel safe in making such offers. If the without prejudice protection was removed, then no one would make any offers. So in the example above, you wouldn’t offer to accept £7,500 if you thought that the judge would find out about it, because you’ll be telling the judge that your claim is worth £10,000.00.

The difference between ‘without prejudice’ and ‘open’

Open correspondence is any email, letter, phone call or meeting which is not without prejudice. So you might write a letter to your employer resigning from your job, or raising a grievance, or during a tribunal case you might request disclosure of vital evidence or contact details for a witness. All open correspondence can be referred to in tribunal in front of a judge. For example, you can point out to the judge that you wrote an open letter to your ex employer requesting copies of your HR file, but no response was ever forthcoming, therefore they must be hiding something. Judges don’t want to see draft settlement agreements marked ‘without prejudice’.

Without prejudice meetings and phone calls

It is very common to pick up the phone to the other side during a case, or even before a claim is issued, and ask to speak without prejudice. If they say yes, this would become a without prejudice phone call. Then tell them that you think that you would accept £x to settle out of court, and perhaps give your reasons.

Three people in a meeting

Without prejudice meetings are less common after tribunal proceedings are issued, simply due to the cost and effort of physically getting people together, but in the more high value cases it can be beneficial to have a without prejudice meeting. It is much more common for your employer to invite you to a without prejudice meeting whilst you are still employed, for example after you have submitted a written grievance but before the grievance is investigated. Your employer would then ask to speak without prejudice, and suggest an exit package for you. Either way, you can check out our dedicated article on without prejudice meetings here.

Where it is a verbal agreement to speak without prejudice obviously there is an element of trust and you need to be careful what you say and who you say it to. Instructing us to represent you is a safe bet in this regard. But more on that later.

Without prejudice negotiation tactics

Normally the ‘open’ letters (those not marked ‘without prejudice’) between the two parties will be outright denials of liability, and at the same time ‘without prejudice’ letters are sent saying “just in case we are wrong about the case, then we offer you £x in full and final settlement.”

There are some very useful pages on this site dealing with negotiating tactics, but essentially it’s important to remember that your employer is not going to give large sums of settlement money to disgruntled employees just because they ask nicely. In fact, you’re probably disgruntled in the first place because your employers are not particularly nice people. So you need to display a tough negotiating stance.

That is not to say you should be rude. Always be polite and reasonable, but still tough. So precis your offer with some salient facts regarding your case. It helps if you can very concisely identify the three legally strongest points and set them out as briefly as possible. Then offer the olive branch of your settlement agreement amount. As you will see elsewhere on this site, it is often advisable to aim high rather than low, but not so high that you look unrealistic.

Legal fees paid for by the employer

The legal fee paid for by the employer for legal advice on settlement agreements (normally around £250-£500+VAT) is meant to be the lawyer’s fee for simply reviewing the settlement agreement document with you and then proceeding to sign it off. This fee would not normally cover an in-depth negotiation of an increased amount, and therefore if you are offered such a service by lawyers within the small fee payable by the employer, then it is unlikely to be a proper negotiation service aimed at getting you the best deal. Of course, your employer is not going to fund a proper negotiation against themselves; instead they will just fund an independent lawyer signing off the deal.

Without prejudice letters and emails

If you want to see examples of without prejudice letters and emails, you can just copy our free templates in the templates section of this site. Here is one we made earlier, which is a very basic one just to give you an idea. The templates above are much more detailed:

[date]

WITHOUT PREJUDICE

Dear Sirs

I write further to my open letter of x date. In that letter I set out my grievances and you should be aware that I am more than willing to pursue this matter to tribunal in the absence of a swift resolution. My health has been badly affected and I attach no price to my health. On a purely commercial basis however, and for a swift resolution, I would be prepared to sign a compromise agreement giving me 3 months’ wages tax free plus my full notice pay. This offer remains open for 7 days from the date of this letter.

Yours faithfully

[your name]


Next steps

If you want to talk to an experienced employment solicitor about the details of your case, and find out how we could help you improve your settlement package. Get in touch on 020 7717 5259, 0800 533 5134 or apply for a free 15 minute consultation.