Without Prejudice Settlement Agreements

Settlement agreements are usually offered to an employee on a without prejudice basis. This means the agreement cannot be presented as evidence in court or at an employment tribunal until it’s signed. Though there are exceptions to this, of course.

The rationale behind without prejudice settlement agreements is that any discussion and movement towards settlement will be facilitated if parties are able to speak freely. If you and your employer are secure in the knowledge that what has been said and, in particular, any admissions either of you might make may not be used against you should the settlement discussions fail, you are more likely to keep talking.

The inclusion of the words ‘without prejudice’ will not necessarily bring the communication within the ambit of without prejudice privilege, however. If a communication is not, in substance, made as a genuine attempt to settle an existing dispute then the without prejudice rule may not apply.

Another phrase you may hear is, ‘subject to contract’. This means that until the wording in the settlement agreement has been agreed and all parties have signed it, the agreement has no legally binding effect.

If you’re confused by some of the terms you’re hearing with regard to a settlement agreement you are being offered, please do give us a call on 0800 304 7255. We provide a free initial consultation, which is an ideal time to clarify your understanding.


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