Without Prejudice & Section 111A: Explained

'Without Prejudice' Communications

The ‘without prejudice’ rule is a fundamental aspect of UK employment law that prevents statements made in a genuine attempt to settle an existing dispute (whether made in writing or orally) from being admissible against the interest of the party that made them.

This protection ensures that parties can negotiate freely without fear that their settlement discussions will later be used against them.

Where this rule applies, such statements are generally inadmissible in both the substantive dispute and in matters relating to costs. However, where communications are marked "without prejudice save as to costs," they remain inadmissible in the substantive dispute but may be considered when determining costs.

Exceptions to 'Without Prejudice' Protection

While the 'without prejudice' rule offers broad protection, certain exceptions exist where such communications may be admissible:

• No Genuine Attempt to Settle: For the 'without prejudice' rule to apply, there must be a genuine attempt to settle. If no such attempt exists, the protection does not apply and the communications may be admissible.

  
  

• Improper Behaviour: Communications made with elements of fraud, misrepresentation, undue influence, or other forms of impropriety are not protected. This exception ensures that parties cannot misuse the 'without prejudice' label to shield unethical conduct.

  
  

• Estoppel: If one party relies on a 'without prejudice' statement to their detriment, the other party may be estopped from asserting its confidentiality, allowing the statement to be admitted as evidence.

  
  

• Muller Exception: In certain circumstances, communications may be admissible to explain delays or apparent acquiescence in legal proceedings, particularly when the communications provide context to the parties' conduct.

  
  

• Relevant Settlement Agreement terms: While the without prejudice communications leading up to a settlement will, subject to the exceptions set out in this note, benefit from such protection, the relevant terms of a settlement agreement that the parties ultimately conclude will not necessarily be protected.

  
  

Section 111A Employment Rights Act 1996: Protected Conversations

Section 111A of the Employment Rights Act 1996 allows employers and employees to engage in confidential pre-termination negotiations, commonly known as 'protected conversations', even where no formal dispute exists.  The purpose is to facilitate frank discussions about ending employment relationships on agreed terms without fear that these discussions will be used as evidence in subsequent unfair dismissal claims.

Exceptions to Section 111A Protection

The confidentiality provided by Section 111A is not absolute. It does not apply in the following circumstances:

• Improper Behaviour: As with the 'without prejudice' rule, if either party engages in improper behaviour—such as harassment, bullying, or applying undue pressure—the protection is lost, and the communications may be admissible in tribunal proceedings.

  
  

• Claims Beyond Unfair Dismissal: Section 111A only protects discussions in ordinary unfair dismissal claims. It does not extend to claims of automatic unfair dismissal, discrimination, harassment, victimisation, or breach of contract, where 'protected conversations' may be used as evidence.

Implications for Employers and Employees

Employers

The rules surrounding ‘without prejudice’ communications and Section 111A ‘protected’ conversations provide a valuable tool to manage workplace disputes efficiently and discreetly, potentially avoiding costly and time-consuming litigation. However, employers must exercise caution in how they conduct settlement discussions; ensuring they do not engage in improper behaviour such as undue pressure, discrimination, or bad-faith negotiations which could undermine the protections they seek to rely on.

Additionally, employers must be mindful that while Section 111A protects pre-termination discussions in the context of unfair dismissal claims, it does not shield communications from being disclosed in cases involving discrimination, whistleblowing, or breach of contract.

Employees

These rules offer a degree of reassurance that they can engage in settlement discussions without automatically jeopardising their legal position. However, employees should be aware of the limitations of these protections and the circumstances in which such communications may still be admissible.

Call a specialist employment lawyer  

Magara Law is an employment law firm in Bicester, Banbury, Reading and Paddington, London, and services clients nationwide. 

For more information or to contact our employment law team at Magara Law, call 01869 325 883 or email roy@magaralaw.co.uk.