Legal correspondence and negotiations often involve tactical wording, with some phrases carrying significant procedural consequences. One of the most important is “without prejudice save as to costs”. This expression, widely used across litigation and dispute resolution, signals a shift from purely protected negotiation to a document that may be shown to the court—but only when costs are considered.
For businesses, individuals, and legal professionals, understanding the nuance of this phrase is crucial in safeguarding interests and managing risk. At Blackstone Solicitors, we help clients navigate legal disputes strategically, making use of cost-effective solutions where appropriate and ensuring communication adheres to procedural standards.
Free Initial Telephone Discussion
For a free initial discussion with a member of our New Enquiries Team, get in touch with us today. We are experienced in dealing with all the legal aspects of Commercial Litigation, and once instructed, we will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you are on the best possible footing from the start and also avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.
What Does “Without Prejudice” Mean?
To appreciate the full meaning of “without prejudice save as to costs”, one must first understand the traditional “without prejudice” rule.
This rule protects communications made in the context of genuine attempts to settle a dispute. Put simply, if a party writes or speaks to the other side in the course of settlement negotiations and labels the communication as “without prejudice”, that communication cannot be relied upon in court as evidence of admissions or offers.
The underlying purpose is to encourage open, candid discussion aimed at resolving disputes without fear that settlement offers or compromising language will be used against the party later.
Key points:
- Applies only to genuine negotiations
- Protects both written and oral communications
- Cannot be waived unilaterally
- Can be overridden in limited exceptions (e.g. misrepresentation or fraud)
Introducing “Without Prejudice Save as to Costs”
The term “without prejudice save as to costs” introduces a qualified exception. Communications sent under this label remain protected during the substantive litigation process, but may be shown to the court when the question of legal costs arises, typically after judgment is given.
This qualification is used most often in settlement offers made under:
- Part 36 of the Civil Procedure Rules
- General pre-action or post-issue negotiations where no formal Part 36 offer is made
By marking correspondence in this way, the offering party preserves confidentiality throughout the dispute but reserves the right to rely on the communication if arguing about costs later.
The Importance of Costs in Litigation
Legal costs in England and Wales can be significant. Under the general rule in civil proceedings, the unsuccessful party pays the successful party’s legal costs—subject to assessment.
However, courts also consider the conduct of parties, including:
- Whether offers to settle were made and reasonably accepted or rejected
- Timing and terms of offers
- Reasonableness in pursuing or defending claims
“Without prejudice save as to costs” letters are designed to influence this assessment and strengthen cost arguments in the event of litigation.
Practical Example
Imagine a dispute between two businesses over unpaid invoices. The claimant sends a letter marked “without prejudice save as to costs” offering to settle for £15,000. The defendant rejects the offer and the matter proceeds to trial, where the claimant is awarded £15,000 or more.
Although the letter was shielded during the litigation itself, once judgment is given, the claimant may rely on it to argue that:
- The offer was reasonable
- The defendant acted unreasonably in refusing it
- The claimant should receive not just standard costs, but indemnity costs (a higher scale of recovery)
The court can then consider the letter as part of its costs assessment.
Strategic Use of the Phrase
Using “without prejudice save as to costs” requires careful thought and timing. Some strategic considerations include:
- Establishing a record of reasonable conduct in settlement efforts
- Encouraging the other side to settle early, thus reducing litigation costs
- Protecting positions in court while reserving rights on costs
- Avoiding premature disclosure of negotiation positions during trial
It is particularly useful where one party believes its offer is likely to be vindicated by judgment and wishes to secure enhanced cost recovery.
Relationship with Part 36 Offers
The Civil Procedure Rules provide a formal mechanism for settlement offers under Part 36, which includes detailed rules on costs consequences if the offer is not accepted and the offering party does better at trial.
Part 36 offers need not be labelled “without prejudice save as to costs” because they are treated automatically as admissible in costs proceedings, but non-Part 36 offers often rely on this label to invoke similar protections.
Where a party does not or cannot use Part 36 (perhaps due to the nature of the claim or timing), they may use a “without prejudice save as to costs” offer instead.
At Blackstone Solicitors, we advise clients on whether to make formal Part 36 offers or use informal cost-qualified negotiations, depending on tactical and procedural goals.
Risks and Misuse of the Phrase
Incorrect use of the label can lead to confusion or procedural error. Common issues include:
- Sending communications labelled “without prejudice save as to costs” too early, before a dispute has crystallised
- Using the term for documents not related to settlement, which may undermine protection
- Relying on such documents too soon in litigation, before the costs phase
Additionally, ambiguity in the content of the letter itself (e.g. unclear offer terms or conditions) can weaken arguments in costs proceedings.
Legal advice is essential to ensure that communications are accurately framed and timed.
Court’s Approach to Costs and Settlement Offers
Courts take settlement conduct seriously when assessing costs. Relevant factors include:
- The reasonableness and timing of offers
- The clarity of terms
- Any refusal to engage in negotiation
- Proportionality and behaviour during proceedings
A well-drafted “without prejudice save as to costs” letter can demonstrate early attempts at resolution and shift the cost burden where the recipient acted unreasonably.
In some cases, parties using such offers have secured indemnity costs, costs on the higher scale, or protection from adverse cost orders.
Best Practices for Drafting
To maximise effectiveness, ensure that “without prejudice save as to costs” communications:
- Include clear, reasonable terms of settlement
- State the offer is made in genuine attempt to resolve
- Specify expiry date or conditions, if relevant
- Avoid ambiguous or contradictory language
- Are sent at appropriate stage, once litigation is anticipated or underway
We recommend retaining proof of delivery and maintaining organised records for use in cost proceedings if needed.
Blackstone Solicitors can assist in drafting strategic settlement communications and advise on best use of cost-related procedures.
Conclusion: A Powerful Legal Tool When Used Correctly
“Without prejudice save as to costs” is more than a procedural catchphrase—it is a strategic legal tool that allows parties to engage in settlement discussions while preserving their position for future cost recovery.
When used appropriately, it can:
- Encourage timely resolution of disputes
- Protect parties from adverse cost outcomes
- Strengthen negotiating positions
- Demonstrate reasonable conduct to the court
However, it must be applied carefully, with proper legal advice, to avoid misinterpretation or procedural pitfalls.
At Blackstone Solicitors, we offer expert guidance in dispute resolution, litigation strategy, and cost management across England and Wales. Whether you are seeking to negotiate a settlement or defend against claims, our team ensures your communications are robust, clear, and aligned with procedural standards.
How we can help
We have a proven track record of helping clients deal with the legal aspects of commercial Litigation. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting. You can read more about the range of commercial property services we offer by clicking here: https://blackstonesolicitorsltd.co.uk/commercial-litigation/
How to Contact Our Commercial Litigation Solicitors
It is important for you to be well informed about the issues and possible implications of commercial litigation. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Commercial Property solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
Comments are closed.
