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“Without Prejudice Save As To Costs” – What Does it Mean?

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“Without Prejudice Save As To Costs” is a term that is used often in legal disputes and is referred to in correspondences between the parties. But what is the meaning and impact of the term “without prejudice?”

When Should You Put Without Prejudice On a Letter?

The main reason for this wording to be used is to allow negotiations to take place in a case without firstly admitting liability. This is where the “without prejudice” part of the phrase comes from. “Without prejudice” communications means that the correspondence cannot be referred to in Court, or outside the scope of legal proceedings. When marking correspondence with the term “without prejudice,” it means that:

  1. The contents of that correspondence cannot be used as evidence in a Court case
  2. The contents cannot be taken as the last word on the case
  3. The contents cannot be used to set a precedent

It therefore allows parties to speak freely about any existing dispute in an attempt to settle the dispute, and where this discussion is marked without prejudice, it cannot be referred to in Court.

However, it should be noted that simply marking a document as without prejudice does not automatically protect that document from disclosure if the correspondence does not form a genuine attempt to settle a dispute.

Lawyers usually write two types of correspondences, those known as “open” letters and those which they mark as “without prejudice”. For example, they will address issues such as liability in open correspondence so that the Court can see these arguments prior to making a decision or providing a Judgment.

The other type of correspondence will be marked as “without prejudice”, and these will be the documents where it is accepted that a dispute has arisen but to avoid further time and costs being wasted, offers will be proposed for settlement as part of alternative dispute resolution.

 

What Does Without Prejudice Save As To Costs Mean?

The above paragraphs look at the term “without prejudice” and the prejudice rule which arises from this wording. However, what does the term “Without Prejudice Save at to Costs” mean?

Marking a communication with the words “without prejudice save as to costs” means that this correspondence cannot be shown to the Court until after the main issue is resolved. However, the ‘save as to costs’ part means that the communication can be disclosed when the Court is considering the issue as to liability of costs.

The term “Without Prejudice Save at to Costs” is used a lot during settlement negotiations and as part of Part 36 Offers, as they are then referred to at Court in relation to costs issues, should one party fail to beat an offer at Court. This would have costs implications and therefore most offers to settle are marked as “without prejudice” communication.

For example, in the famous case of William Roache v The Sun, the Claimant won a legal libel case and was awarded £50,000 by the Court. However, the Court in awarding costs found that the Claimant should pay £120,000 in legal fees to the other side, because the amount of £50,000 had already been offered to the Claimant previously, and he had not accepted this offer; thus, he was liable for paying the legal costs of the case given that significant costs had been wasted, when the case could have been settled much sooner.

 

How Can ARC Costs Assist?

If you require clarification on a settlement offered or a settlement agreement and the wording of the same, you can seek legal advice from ARC Costs in relation to the costs implications which may arise around the term “without prejudice save as to costs.”

As specialist Costs Draftsmen and Costs Lawyers, we can assist in numerous costs issues, and hold extensive experience in preparing Bills of Costs and negotiating costs with the opposing party. Whether you are the receiving party or the paying party, we can assist, and we are adept in preparing legal arguments for both Points of Dispute and Points of Reply. As Costs Lawyers, we can also provide representation at any Costs and Case Management Conference, or detailed assessment hearings due to take place.

Should you wish to discuss your costs query with us, please contact us on 01204 397302 or email one of our experts at info@arccosts.co.uk. Alternatively, you may complete our online enquiry form, and we will contact you shortly.

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