By Steve M. Chikengezha
Ofttimes documents are sent out to clients, other lawyers and organizations with the tag “without prejudice.” What does this mean? And what are the implications of the tag, “without prejudice”? Below is a brief explanation of the meaning and consequences of using that phrase in letters, documents and any other form of correspondence that may be either verbal or written.
By definition “without prejudice” means a communication setting forth particulars or facts made in a document marked “without prejudice” or verbally on a “without prejudice” basis. If all of this is undertaken with a legitimate attempt to settle a dispute, generally it will not be admissible in court as evidence against the person making the statement unless they provide their explicit consent.
The primary motive behind this principle is, it is, the public interest to encourage parties to resolve disputes and avoid litigation wherever possible. Hence, if a party tries settling a dispute under the cape of “without prejudice”, when the matter comes before a court, such communication may not be used against the other party.
This includes but is not limited to: concessions, offers of compromise, etc. All these offers and concessions if made at Pre-Trial stage or before litigation with the intent to avoid reaching Trial and an agreement is unreached remain privileged. As long as they were put forward on a “without prejudice” basis at the time of negotiation.
For example, if X is owed damages of US$5,000 and legal proceedings have issued in respect of it and X offers to accept a sum of US$2,000 in a “without prejudice” letter, but the offer is rejected by Y. The rejecting party (Y) cannot subsequently produce the offer in court as evidence of a weakness in X’s case, or as evidence of conceding to the damages.
To use or rely on “without prejudice” privilege a party has to show that at the time of the communication or alleged concession either legal proceedings had commenced or it was done in contemplation of litigation. This principle is adequately captured in the case, Naidoo v Marine & Trade Insurance Co Ltd 1978 (3) SA 666 where the Court stated the following:-
As a general rule, statements made expressly or impliedly on a ‘without prejudice’ basis in the course of bona fide negotiations for the settlement of a dispute will not be allowed into evidence.
The communication must attempt to resolve the dispute. This is significant because merely making something without prejudice does not necessarily grant it protection. The substance of the document and/or correspondence with the matter at hand determines whether this principle is applicable to it. There has to be a genuine attempt to settle the issues out of court. As long as a settlement has been reached, the negotiations cease being without prejudice and the protection falls off. Thus, once there is a settlement the privilege will be inapplicable However if parties fail to broker a settlement, the “negotiations” will remain protected by privilege. In Gcabashe v Nene (supra) stated,
The resolution of a dispute with a genuine view to settlement appears to be the main consideration. If the 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.
There a few exceptions to the principle. And these are applied at the Court’s discretion. In Kazingizi v Equity Property HH 797-15 the Judge alluded to some of these exceptions when he stated the following:-
…it is always in 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 that 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.
Therefore, when parties walk into meetings and exchange letters with the other side it is always important to have a full appreciation of this principle.
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