In the heat of commercial disputes, civil litigation, or family law negotiations, parties often seek to resolve their disagreements before trial. Negotiations are frequently conducted with an express label of “without prejudice” a term meant to protect settlement discussions from being used against the parties later in court. Consider a debtor and creditor locked in dispute: they agree to meet and discuss compromise terms. To safeguard frank dialogue, counsel marks their correspondence “without prejudice”. Yet when the negotiations collapse and one party sues, a critical question arises: can the defendant later use those settlement offers or admissions against the other party?
Despite its pervasive use in legal correspondence, the phrase “without prejudice” is widely misunderstood. It is not a magical shield that renders all marked material inadmissible; nor does it bar parties from pursuing their substantive rights. Rather, it operates within specific limits, balancing the public policy goal of encouraging settlement with the integrity of evidence in litigation.
This article examines the doctrine’s legal effect under Nigerian law, its origin in public policy, relevant statutory and judicial authorities, exceptions to the rule, and practical implications. This article seeks to clarify the legal parameters of “without prejudice”, analyse how Nigerian courts have interpreted and applied the doctrine, and outline the exceptions where without prejudice communications may nonetheless be admissible.
Historical and Policy Basis
The concept of “without prejudice” is rooted in public policy that favours the settlement of disputes without resort to formal adjudication. As a general rule, communications expressly labelled “without prejudice” in the context of genuine attempts to settle a dispute are inadmissible in evidence, such that neither admissions nor offers contained therein can be used to prove liability in subsequent proceedings[1]. This principle, initially developed in English law, has been adopted in many common law jurisdictions including Nigeria.
In Cutts v. Head, Oliver L.J recognised the policy: communications aimed at settling disputes should remain confidential so as not to deter parties from frank negotiations.[2] This seeds the modern rule that without prejudice communications are protected from admissibility in litigation to promote settlement.
Without Prejudice in Nigerian Law: Statutory and Judicial Recognition
1. Statutory Framework
Section 196 of the Evidence Act 2011
The primary statutory provision governing the effect of “without prejudice” is found in Section 196, Evidence Act 2011:
“A statement in any document marked ‘without prejudice’ made in the course of negotiation for a settlement of a dispute out of court, shall not be given in evidence in any civil proceedings in proof of the matters stated in it.”
This codifies the common law rule in Nigerian law and is the direct statutory source for the legal effect of without prejudice communications in civil litigation.
Section 26 of the Evidence Act 2011
It further provides a foundational basis for the doctrine of “without prejudice” in Nigerian law. The section states that admissions are not relevant if they are made upon an express condition that evidence of them is not to be given, or under circumstances from which the court can infer that the parties agreed that the evidence should not be given.
This provision captures the underlying evidential principle behind without prejudice communications. Where parties engage in settlement negotiations on the express or implied understanding that their statements will not be used in court, such admissions are rendered inadmissible by virtue of Section 26. The use of the phrase “without prejudice” in correspondence is a clear manifestation of this express condition, signalling a mutual intention that the content of the communication should not be adduced in evidence.
Accordingly, while Section 196 specifically addresses documents marked “without prejudice” in the context of out-of-court settlement negotiations, Section 26 provides the broader evidential justification for excluding such admissions. Together, both provisions reinforce the public policy objective of encouraging candid settlement discussions by ensuring that admissions made in that context do not prejudice the maker in subsequent litigation.
The doctrine aligns with general evidence principles under the Evidence Act 2011 (as amended), particularly those relating to relevance and exclusionary rules. Relevant evidence is generally admissible (Sections 1–2, Evidence Act), but public policy considerations can exclude relevant evidence, including settlement negotiations.[3]
2. Nigerian Judicial Authority
In Alhaji Yukubu v. Mohammed (2003) 15 NWLR (Pt. 840) 209 (CA), the Court of Appeal endorsed the doctrine, holding that settlement negotiations marked “without prejudice” are ordinarily not admissible as evidence in litigation. The court emphasised that the purpose of the rule is to encourage parties to explore settlement without fear that discussions will be used against them.[4]
Similarly in Obande v. FBN Plc, the Court of Appeal (affirmed by Supreme Court principles) confirmed the basic public policy purpose of the rule that a letter marked “without prejudice” is inadmissible in evidence where it was written in the course of a dispute and as part of negotiation. Therefore, an offer made in such a letter cannot be used to the detriment of the party who made it.[5]
Core Legal Effect of “Without Prejudice”
1. Inadmissibility of Settlement Offers
The key legal effect is inadvertible exclusion: communications, offers, and admissions made in “without prejudice” negotiations cannot be tendered in evidence to prove liability, fault, or the terms offered in settlement. In practical terms, neither party can rely on the content of without prejudice correspondence to prejudge the merits of a claim.
For example, a party’s offer to accept a lower amount in settlement cannot be used against them to show that they believed liability or the amount due. The doctrine protects such offers as part of settlement discussions.
2. Application Only to Genuine Negotiations
Not every communication marked “without prejudice” automatically attracts the protection. Judicial authorities insist that the communication must arise in the course of genuine attempts at settlement. Mere correspondence or statements labelled “without prejudice” but not connected to a bona fide settlement negotiation may still be admissible.
In Greyshot Enterprises Ltd v. Hon. Minister of Agriculture & Ors. and other cases, courts have held that where the negotiations culminate in an enforceable agreement, “without prejudice” correspondence cannot be used to defeat the existence of that agreement.[6]
Without Prejudice: Exceptions to the Rule
While the general rule protects settlement negotiations, there are established exceptions where “without prejudice” communications may be admitted. In Unilever Plc v. Procter & Gamble Co, it was held that without-prejudice privilege does not apply where the communication is relied upon to prove fraud, misrepresentation, undue influence, or illegality.[7]
1. Where There Is Misrepresentation, Fraud, or Illegality
If a “without prejudice” communication is shown to involve fraud, misrepresentation, or illegality, the protection may be lifted. Courts have emphasised that public policy will not shield communications that are part of fraudulent or dishonest dealings.
The underlying logic is that a policy designed to promote settlement should not protect wrongful conduct.
2. Where the Communication Is Relevant to Issues Outside Settlement
If the content of the communication is relevant to collateral issues not strictly part of settlement negotiations for example, delay, undue influence, or estoppel courts may admit the evidence. Nigerian courts have recognised that the rule cannot be used to conceal evidence of wrongdoing unrelated to settlement.
3. Where Both Parties Have Agreed to Waive the Protection
Parties may waive the without prejudice privilege and agree that their communications be admissible in evidence. Such waiver must be clear and informed; merely marking a document “without prejudice” does not suffice to waive protection the agreement to waive must be explicit.
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Practical Implications of Without Prejudice in Litigation
1. Drafting and Labelling
Lawyers must ensure that correspondence genuinely relates to settlement efforts and is properly labelled without prejudice if they wish to invoke the doctrine. It is not sufficient to simply write “without prejudice” at the top of a letter; the communication must genuinely be about compromise.
2. Strategic Use in Negotiations
The doctrine encourages parties to candidly explore compromise without fear that their concessions will later harm them in litigation. This often leads to streamlined settlements and reduced court congestion.
3. Caution Against Misuse
Parties should not misuse the label to hide admissions or unfavorable facts they intend to use in court. Courts are vigilant against such misuse and may admit the evidence when the context reveals bad faith.\
Final Thoughts on Without Prejudice
The doctrine of “without prejudice” plays an important role in Nigerian civil litigation and dispute resolution by protecting the confidentiality of settlement negotiations. Its main legal effect is to make settlement offers and corresponding communications inadmissible in proceedings on the merits, thereby promoting open negotiation and dispute resolution out of court.
Nigerian courts have adopted the common law rule, particularly in decisions such as Yukubu v. Mohammed and Arise and Obande v FBN. However, the protection is not absolute; communications may be admissible where they involve fraud, misrepresentation, collateral issues, or where the parties clearly agree to waive privilege. Lawyers should therefore ensure that without prejudice communications are used properly, in good faith, and in the correct context if they wish to rely on the doctrine’s protection.
[1] See generally the common law “without prejudice” rule as protecting settlement negotiations from admissibility in evidence in Cutts v. Head [1984] 1 All ER 597.
[2] Ibid.
[3]Evidence Act Cap. E14 LFN 2011 (as amended); relevant exclusionary principles.
[4] Alhaji Yukubu v. Mohammed (2003) 15 NWLR (Pt. 840) 209 (CA) (Nigerian Court recognising “without prejudice” rule).
[5] Obande v. First Bank of Nigeria Plc (2010) 5 NWLR (Pt. 1190) 54.
[6]( 2002) 9 NWLR (Pt. 771) 1.
[7] [2000] 1 WLR 2436 (CA).
CONTRIBUTORS
Lead Partner, Eko Solicitors & Advocates
Counsel EKO SOLICITORS AND ADVOCATES
Graduate Trainee, EKO SOLICITORS & ADVOCATES