Negotiation Tactics – “Without Prejudice or Without Prejudice Save as To Costs?” - written by Wayne Spring - 06/05/2018

A decision made in early 2018 considered the impact of a “Without Prejudice” and a “Without Prejudice Save As To Costs” settlement proposal. The matter of Marcura FZE & Another –V- Nisomar Ventures & Another [2018] EWHC 523 QB provides for an interesting analysis of these two types of tactic.

When undertaking negotiations it is frequently stated that the same is conducted “Without Prejudice”. This type of negotiation allows the parties to engage without fear that the same will be used in Court. The use of a “Without Prejudice” negotiation implies that there will be no repercussions as these cannot later be relied upon. This is a sharp contrast to the negotiation or communication advanced as a “Without Prejudice Save As To Costs” proposal. These negotiations are able to be presented to the Court post judgment/assessment to allow the Court to ascertain the reasonableness of the parties in the conduct of negotiation.

The aforementioned matter looked at an alleged unlawful disclosure and use of confidential information upon which the Claimant obtained relief and damages by way of injunctive relief and £35,000 settlement without an admission of liability. What became a salient issue is whether during the course of these negotiations the meeting between the parties was held “without Prejudice” or “Without Prejudice Save As To Costs”.

The presiding judge His Honour Judge Vineall Q.C. stated “the distinction between a Without Prejudice and Without Prejudice Save As To Costs is both real and important. The advantage of a purely Without Prejudice meeting is that it can lead to the frankest possible discussions, without either party being worried that what they say might be used against them on costs. If such a meeting is purely Without Prejudice, either party wanting to make an offer which might affect costs can put such an offer in the subsequent Without Prejudice Save As To Costs letter” . Effectively the judge found that what was ultimately decided in respect of the meeting was Without Prejudice only and therefore what was discussed had no influence or impact on the costs decision.

When formulating the decision the judge found that he did not need to seek citation to the Court of Appeal decision in Gresham Pension Trustees –V- Cammack [2016] EWHC Civ 655 and that a “Without Prejudice Save As To Costs” offer can only ever be reached by an express statement not implied, which is what the Defendant in Macura submitted. The Court having considered the basis upon which assessment sought2 and that the Claimant had achieved relief sought and damages there was only one outcome and that was that the Defendant had to pay the Claimant’s Costs.

It is paramount in this decision that when negotiating the parties both fully understands the basis upon which they engage. There appears to be a clear distinction between a “Without Prejudice” offer and a “Without Prejudice Save As To Costs” offer. It is therefore prudent that if a party later wishes to rely upon a “Without Prejudice” offer they do so by addressing the same in communication clearly marked “Without Prejudice Save As To Costs”.

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