The Sunday Mail
THE phrase “without prejudice” may not be new to you, but do you really know what it means and its legal implication?
The term is more often than not used by parties that want to settle their disputes out of court.
It means “without implying an admission of liability”. When used in a document or letter, “without prejudice” means what follows:
(a) cannot be used as evidence in a court case;
(b) cannot be taken as the signatory’s last word on the subject matter; and
(c) cannot be used as a precedent.
The general rule is that the contents of such documents normally cannot be disclosed to courts.
Without prejudice encourages parties to a dispute to try and reach a settlement without the fear of having their communications adduced in court.
It, thus, allows parties and/or their legal advisers to speak freely and openly. This means parties can make concessions or compromises without the risk that what they say can be used against them later in court if the negotiations fail. The general rule, therefore, is that any communication between the disputing parties during negotiations cannot be used in court as evidence. Without prejudice can apply to written or oral communication between parties. In Casteno v Gabriel, 302 NYS 2d, 943 at 946 (1969), Wahl J of the civil court of New York held that “The words without prejudice, when added to letters, only mean that, in the event of negotiations carried on by those letters not resulting in any agreement, nothing in them is taken as an admission.”
The without prejudice principle enables a party to claim privilege from disclosure to the court of documents covered.
The privilege rests first upon the express or implied agreement of the parties themselves that communications in the course of the negotiations should not be admissible in evidence.
Second, it derives from a public policy that rests upon the desirability of preventing statements or offers made in the course of negotiations being brought before the court on trial as admissions of liability.
“Tapper, Colin, Cross & Tapper on Evidence”, 10th Edition, London: Lexis – Nexis, 2004 p. 497 – describes the maxim without prejudice in these terms: “As part of an attempt to settle a dispute, the parties frequently make statements without prejudice. When this is done, the contents of the statement cannot be put in evidence without the consent of both parties . . . The statements often relate to the offer of a compromise and, were it not for the privilege, they would constitute significant items of evidence on the ground that they were admissions. Obviously, it is in the public interest that disputes should be settled and litigation reduced to a minimum so the policy of the law has been in favour of enlarging the cloak under which negotiations may be concluded without prejudice.”
Parties have the freedom to engage each other outside the court with a view to reaching settlements of their disputes.
To enable them to do so in a free, frank and open manner, they enjoy the privilege of speaking to each other freely when they state in clear and categorical terms that their discussions are on a without prejudice basis.
Under the stated circumstances, they can ventilate the issues relating to their respective cases without the apprehension that what they say to each other during negotiations would be used by one party as evidence which shows the other’s liability when their case eventually finds its way to the doors of a courtroom.
If a settlement is thereafter reached, the negotiations leading up to it should be available to the court, since the whole basis of the non-disclosure would have fallen away.
The position of our law is that documents do not necessarily have to be marked “without prejudice” for them to be protected. (Gcabashe v Nene 1975 (3) SA 912 at 941 E).
On the other hand, merely labelling a document “without prejudice” does not necessarily confer any privilege on the contents.
What is important is whether the communication is considered privileged from an objective point of view. [Crowford v Roset and Cornale (1992) 69 B.C.L.R (2d) 349; Podovinikoff v Montgomery (1984), 59 B.C.L.R 204].
The parties to negotiations may also consent to the admission of without prejudice communications.
Exceptional circumstances, such as the use of without prejudice communications to prove certain things, for example, that it contains a threat, may permit a departure from the general rule. [Naidoo v Marine & Trade Insurance Co Ltd (supra), at 667 F: Hoffend v Elgetu 1949 (3) SA 91 (AD)].
In Hirschfeldt v Standard Charted Bank of Botswana (1996) BLR 640 (CA), the document concerned was admitted as evidence because its only use was to prove the credibility of the defendant.
It is always at the discretion of the court to determine whether to admit or not to admit without prejudice communications.
In exercising its discretion, the court may remove the privilege attaching to such communication if it deems the admissibility of such communication is essential in proving certain things, such as the credibility of a witness, or if it considers that the upholding of the privilege would be contrary to public policy, for instance, where the communication contains a threat or an act of insolvency.
In Peter Kazingizi and Anor v Equity Properties (Pvt) Ltd HH797/15, Mathonsi J (as he then was) held that there was nothing privileged in a payment plan.
He proceeded to remove the privilege attaching to a letter in his exercise of discretion.
LEGAL DISCLAIMER: The material contained in this article is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. They are not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in the article. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements.
* Arthur Marara is a corporate law attorney practising law in Harare. He is also a notary public and conveyancer. He is also passionate about employment law, commercial law, family law and promoting legal awareness and access to justice. He writes in his personal capacity. You can follow him on social media (Facebook Attorney Arthur Marara), or WhatsApp him on +263780055152 or email [email protected]
