“Without prejudice” is a legal term used in South Africa to protect communications made during genuine attempts to settle a dispute. When a communication is marked “without prejudice,” it generally cannot be used as evidence in court or relied upon as an admission of guilt or liability. This protection is known as settlement privilege, and it encourages parties to negotiate openly and candidly without fear that their words will later be used against them.

The Legal Basis of the “Without Prejudice” Rule

In South Africa, the “without prejudice” rule is rooted in the common law, not statute. It is based on a long-standing public policy principle that disputes should be resolved as cheaply, quickly, and amicably as possible, and that parties should be free to engage in full and frank settlement discussions without the risk of those discussions being disclosed in court.

Importantly, it is not necessary to use the exact words “without prejudice” for the privilege to apply. Any statement that forms part of genuine negotiations aimed at settling a dispute may be protected, regardless of whether the phrase is used. What matters is that (a) a dispute exists, and (b) the communication was made as part of bona fide negotiations to resolve that dispute.

How the Privilege Works

When the privilege applies, neither party may introduce the content of the settlement negotiations as evidence in subsequent court proceedings. This protection extends to both written and oral communications. The privilege belongs to both parties jointly, which means it can only be waived if both sides agree.

This is particularly useful in civil disputes, employment matters, and commercial negotiations, where parties may wish to explore settlement options — including making concessions or admissions — without committing themselves legally.

Exceptions to the Rule

The “without prejudice” rule is not absolute. South African courts have recognised several exceptions:

  • Insolvency admissions: If a party concedes insolvency during “without prejudice” negotiations, that admission may be used in sequestration or winding-up proceedings. Public policy dictates that such admissions should not be shielded.
  • Calderbank offers: A party may make a “without prejudice save as to costs” offer (known as a Calderbank offer). This type of offer remains privileged on the merits but may be disclosed to the court when it determines costs. The offer must explicitly state it is made “without prejudice except in relation to costs” to qualify.
  • Fraud or illegality: Communications involving fraud, duress, or other illegality are not protected by the privilege.
  • Concluded settlement agreements: Where negotiations result in a binding settlement, the agreement itself is admissible to prove its existence and terms, particularly if reduced to writing and signed.
  • Acknowledgement of debt and prescription: Where a debtor acknowledges liability during “without prejudice” negotiations, that acknowledgement may be admitted in evidence for the limited purpose of interrupting the running of prescription under section 14 of the Prescription Act 68 of 1969. In KLD Residential CC v Empire Earth Investments 17 (Pty) Ltd 2017 (6) SA 55 (SCA), the Supreme Court of Appeal recognised this exception, reasoning that a debtor should not be able to use the privilege to escape a debt they have in fact admitted owing. The admission remains protected for every other purpose. The judgment is available on SAFLII.

Practical Considerations

While the “without prejudice” label is a useful tool, it does not provide blanket protection. Simply marking a letter “without prejudice” does not make it privileged if there is no genuine dispute or no real attempt at settlement. Courts will look at the substance, not just the label.

In the context of letters of demand and the early stages of civil litigation, “without prejudice” communications can play a key role in resolving matters before they reach court. If a dispute escalates to the point of summons being issued, any privileged communications from the negotiation phase remain protected.

It is always advisable to seek legal counsel when drafting or responding to “without prejudice” communications, particularly in high-stakes disputes where the admissibility of such correspondence could be contested.

Updated 23 June 2026 — Added the acknowledgement-of-debt exception established in KLD Residential CC v Empire Earth Investments 17 (Pty) Ltd 2017 (6) SA 55 (SCA): an admission of liability made during without prejudice negotiations is admissible, solely to interrupt prescription under section 14 of the Prescription Act 68 of 1969, even though it remains privileged for all other purposes.