Last reviewed: June 2026 · For use in England & Wales · eLitigant is a Community Interest Company (No. 16566612), not a law firm. Always check the current official form on GOV.UK before you file, and sign the statement of truth yourself.
In short
A “without prejudice” settlement offer letter is a written proposal to settle a genuine dispute, made on terms that cannot later be shown to a judge as an admission. It lets you negotiate openly without weakening your position if the matter reaches court. To be protected, it must be a real attempt to settle a real dispute — the label alone is not enough. eLitigant’s Chris drafts this for you — you check, sign and send.
What a “without prejudice” settlement offer letter is
A “without prejudice” settlement offer letter is a written proposal to settle a dispute — either an offer you make, or your response to an offer made to you. Marking a letter “without prejudice” engages a long-standing rule of English law that protects genuine settlement negotiations: statements made in a real attempt to settle an existing dispute cannot normally be put before a court as evidence of an admission. The rule exists because the courts want to encourage people to settle their differences rather than fight every point to trial. It was confirmed by the House of Lords in Rush & Tompkins Ltd v Greater London Council [1989] AC 1280, which described the rule as resting on “the public policy of encouraging litigants to settle their differences.”
In plain terms: it lets you say “I think you have a point, and I’ll pay £2,000 to end this” without that concession being read out against you later if negotiations fail and you end up in court.
When and why you would use one
The courts in England & Wales expect parties to try to resolve disputes before issuing a claim. The Practice Direction on Pre-Action Conduct and Protocols (paragraphs 8 to 11) says litigation should be a last resort, that parties should consider negotiation and other forms of alternative dispute resolution (ADR), and that offers to settle can be made before proceedings start. Paragraph 11 warns that silence in response to, or an unreasonable refusal of, ADR “might be considered unreasonable by the court” and can lead to costs penalties. A genuine without prejudice offer is good evidence that you tried to settle.
You might send one to head off a claim entirely, to narrow what is in dispute, or to respond constructively to a demand or letter before action. It is useful in money disputes, contract disagreements, debt claims, building and consumer disputes, and many small claims.
“Without prejudice” versus “without prejudice save as to costs” versus Part 36
There are three related routes, and it helps to know the difference:
- “Without prejudice” — the offer is fully protected and is not shown to the judge at all (unless both sides agree).
- “Without prejudice save as to costs” (often called a Calderbank offer, after Calderbank v Calderbank [1976]) — the offer stays hidden during the case, but can be shown to the judge once the case is decided, when the court is deciding who pays the legal costs. This adds pressure: if the other side rejects a reasonable offer and does no better at trial, they risk a costs penalty.
- A Part 36 offer — a formal offer made under Part 36 of the Civil Procedure Rules, with strict requirements (it must say it is made under Part 36 and give a “relevant period” of at least 21 days for acceptance). Part 36 offers can be made before proceedings start. They carry powerful, largely automatic costs consequences if rejected and not beaten at trial. Part 36 is technical, and a defective Part 36 offer can lose its protection — many people instead use a plainer “without prejudice save as to costs” letter.
This guide covers the general “without prejudice” (or “without prejudice save as to costs”) letter. If you want the formal Part 36 mechanism, that is a separate, more technical document.
What to include
A clear, dignified settlement offer letter usually contains:
- The words “WITHOUT PREJUDICE” (or “WITHOUT PREJUDICE SAVE AS TO COSTS”) at the top.
- The names of both parties and a short reference to the dispute.
- A brief, neutral summary of the disagreement — without admitting liability if you do not intend to.
- The offer itself: a clear figure or set of terms, what is being settled, and what each side will do.
- Any conditions — for example, “in full and final settlement of all claims arising from…”.
- A deadline for acceptance and how to accept.
- A line confirming the offer is made to settle and is not an admission of liability.
Common mistakes to avoid
- Relying on the label alone. Writing “without prejudice” on a letter that is not a genuine attempt to settle a real dispute will not protect it. The substance matters more than the heading.
- Using it on the wrong letter. A simple demand for payment, or a letter before action setting out your claim, is usually an open letter — not without prejudice.
- Making threats. Do not threaten anything you are not lawfully entitled to do, or make threats of criminal action to recover a civil debt. Keep the tone businesslike.
- Being vague. An offer with no figure, no deadline, and no clear terms is hard to accept and weak as evidence that you tried to settle.
- Forgetting “subject to contract” if you want the terms only to bind once a written settlement agreement is signed.
Frequently asked questions
Does marking a letter “without prejudice” guarantee a judge will never see it?
No. It only protects genuine settlement communications about a real dispute. If the letter is not really an attempt to settle — or if both parties agree to disclose it, or it falls within a recognised exception — the protection may not apply. A “save as to costs” offer can also be shown to the judge after the case, when costs are decided.
Should I send a “without prejudice” letter or an open letter before action first?
They do different jobs. An open letter before action sets out your claim formally and is part of the pre-action steps the courts expect. A without prejudice letter is for negotiating settlement. Many disputes involve both: an open letter stating the claim, and separate without prejudice correspondence exploring a deal.
Is a settlement reached this way legally binding?
Once both sides agree clear terms, a settlement can form a binding contract. To avoid arguments, settlements are usually recorded in a short written agreement signed by both parties. Marking negotiations “subject to contract” keeps them non-binding until that document is signed.
This guide is general information about court procedure in England & Wales, not legal advice. eLitigant is not a law firm. We help you prepare your own documents; you decide what to send and you sign it.
eLitigant drafts it; you check, sign & send. Not a law firm; information, not advice.
See it done — what Chris drafts for you
A worked example, drafted to a professional standard from your details — ready for you to check, personalise and send. Fictional sample.
Without Prejudice Save as to Costs
The Manager
Brightwater Joinery Ltd
14 Kiln Lane
Derby DE1 3QA
From: Mrs Helen Okafor, 8 Maple Court, Loughborough LE11 2BX
Date: 19 June 2026
Dear Sir or Madam
Re: Disputed invoice no. 4471 for kitchen fitting works at 8 Maple Court — our dispute dated 3 April 2026
I write to propose terms to settle the dispute between us regarding the kitchen fitting works completed at my home in March 2026, without the need for either of us to start court proceedings. This letter is written without prejudice save as to costs.
As you know, you have invoiced me £4,200 for the works. My position is that the worktop was installed with a visible misalignment and that two cabinet doors do not close, which I estimate would cost £900 to put right. I do not accept that the full invoice is payable, although I recognise that much of the work was completed to a good standard and I have no wish to prolong this matter.
In the interests of resolving this dispute promptly and avoiding the cost and time of a claim, I offer to pay you £3,300 in full and final settlement of invoice no. 4471 and of all matters arising from the works. This offer is made to settle and is not an admission of liability on my part.
This offer is open for acceptance until 5pm on 10 July 2026. To accept, please confirm in writing, after which I propose we record the agreement in a short settlement letter signed by us both and I will pay the agreed sum within 14 days by bank transfer.
If we are unable to agree, I reserve the right to bring this letter to the attention of the court on the question of costs. I would much prefer to resolve matters amicably and I look forward to hearing from you.
Yours faithfully
Helen Okafor
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