What exactly does "without prejudice" mean and how does it work?

Question

According to businessdictionary.com without prejudice means

Law phrase: Without abandonment of a claim, privilege, or right, and without implying an admission of liability.

This sounds pretty good. So why doesn't everyone use it all the time, or at least have it included with the boilerplate email footer like "this message is confidential". Could it back fire in the sense if the writer included it, then they could not use their message as evidence in court?

According to a comment on LinkedIn made by Edward Prybylko

Without Prejudice is a codified expression meaning that you reserve the right to revoke or amend the agreement of the contract, much like the ellipses ("...")

How does this work? What would be stopping a person from amending a contract to change the price of things unilaterally, just the fact no one would sign a contract with the phrase?

Is "without prejudice" normally used in written communications (like emails) or more in formal contracts that are being signed?

Answer 1

Though "without prejudice" does mean what the dictionary says, and bdb's example of a claim in the wrong court being dismissed without prejudice (meaning the claimant is free to refile in the correct court, whereas without the phrase a dismissed claim could not be refiled) is a good one, it is not a magic spell that allows you to bypass the inconvenient bits of the law: despite what you read on the internet, there are remarkably few such incantations, or at least effective ones.

'Without prejudice' is typically used in settlement negotiations, where you might suggest "We will admit our client is at fault, if you agree to limit the damages to the actual repair bill". Obviously if the negotiations break down it would prejudice your case that you are not at fault if this letter could be made public, and equally obviously it is in the public interest for such negotiations to settle cases before trial if possible; so your letter is marked 'Without Prejudice' (to our public assertion that we are not at fault), which means that the letter cannot be put in evidence. The law on without prejudice communications has been pretty well codified in most jurisdictions, and neither putting the words on a non-confidential document nor omitting them on a confidential one will actually affect the outcome; but lawyers never like to leave out words where they might be useful.

It looks from your quotation as if Mr Prybylko has extended this interpretation further than it can reasonably bear (and also misunderstands ellipses). "'Without prejudice' [means] that you reserve the right to modify or amend the agreement of the contract"; well, no it doesn't. If you propose a contract on certain terms it is implicit that either the other person agrees (and you both keep the terms) or he does not (and you may suggest changed ones); "Without Prejudice" does not affect this. Similarly, if you try to keep the words in a final signed contract, any competent lawyer will strike them out as surplusage; unless you specify without prejudice to what and why, they are meaningless and can only make the contract less useful.

There are other contexts where the phrase can helpfully be used, such as accepting a payment without prejudice to your ability to sue later, which is the opposite of "in full and final settlement"; but simply marking all documents 'Without Prejudice" will not save you from anything but the respect of lawyers.

Answer 2

I virtually never see "without prejudice" used in anything but court documents, unless the writer does not know what he's saying.

A typical example would be when a person sues someone, but brings the case in the wrong court. The judge would dismiss the case without prejudice, meaning that the plaintiff could refile somewhere else. In contrast, if the person filed in the correct court, but the judge ruled that the plaintiff had done nothing wrong, the judge would then dismiss the case with prejudice.

I believe I have on some occasions seen the phrase used in legal correspondence, perhaps noting, for example, that a party was willing to settle his sexual harassment claim for X amount of money without prejudice to their claims for some unrelated issue.

In either event, "without prejudice" is typically referring to the ongoing ability to litigate a claim. I'm not entirely clear on how you're envisioning it being used as e-mail boilerplate, but I can't see any reason to do so. If you did, that would not have any effect on the e-mail's admissibility.

EDIT: One other note, because I hadn't looked at it before. The LinkedIn article to which you linked and the comments on it are basically nonsense. Legal advice from a graduate of the "School of Life" is about as valuable as life advice from a graduate of a school of law.