Understanding the “without prejudice” rule.
The “without prejudice” rule prohibits the admission into evidence of communications made, whether written or orally, in an attempt to settle a dispute. However, this rule, like many others in South African law, is not absolute and there are exceptions. Public policy considerations, for example, may warrant the admission of such statements into evidence.
In the full article, we unpack this rule. Read more about the interpretation of this term….
The “without prejudice” rule prohibits the admission into evidence of communications made, whether written or orally, in a bona fide attempt to settle a dispute. This rule, like many others in South African law, is not absolute and there are exceptions. South African courts may deviate from the general rule that statements made on a “without prejudice” basis may not be admitted into evidence when public policy considerations require the courts to do so.
The courts have stated that an offer made on a “without prejudice” basis may be admitted into evidence as an act of insolvency, as the nature of insolvency proceedings involves public interest and the trading public must be protected from the risk of further dealing with a person or company trading in insolvent circumstances. Furthermore, an acknowledgement of liability may also be admissible as evidence for the sole purpose of interrupting prescription, and not to be used as an admission of liability.
Further exceptions that have been identified by the courts are:
- negotiations which result in an agreement;
- an explanation for delay;
- an estoppel;
- a misrepresentation;
- perjury;
- blackmail; or
- any unambiguous impropriety.
In the case of WDL and Others v Gundelfinger and Others, the court admitted into evidence statements made on a “without prejudice” basis for the sole purpose of determining whether there was a disclosure of information, which could consequently dilute its confidentiality. However, the statements that were admitted into evidence were not considered when a final decision was made on the merits of the case.
The privileged nature of statements made on a “without prejudice” basis is not absolute. South African courts have identified exceptions to the rule, and it is clear that public policy considerations may warrant the admission of such statements into evidence.