I’m quite convinced that the words WITHOUT PREJUDICE are the most misused and misunderstood words in the dog-eat-dog money-owing world. For many people these two words are just something one needs to place on any correspondence to a foe – so as the correspondence can’t be used against you in a court of law, they say. WRONG! It affords no protection at all. It can, and more than likely, it will be used against you. But that is just my layperson’s opinion. I am not a lawyer!
In order to use the words on a page/email you need to understand as to why.
In my opinion is (as a layman) WP should be headed across the top of your page/email when you make an OFFER to settle the dispute with your debtor. This also applies in reverse – if the debtor wishes to make an offer to the creditor.
Let’s say you have a debtor owing you $10k. You may decide (and I’d recommend the concept) that you email your debtor ‘That we settle this for $8k ‘in full & final’ provided I’m paid by COB Friday fortnight’. In such case, it is imperative that you head it up as WITHOUT PREJUDICE across the top. Why? Well, should the debtor ignore it and the whole nasty mess ends up in court, the debtor will, more than likely, say ‘But Your Honour, he agreed to take $6k.’ If the off is WP it cannot be used in such way.
In my layperson’s opinion (having learnt from experience) it is very wise to make a WP offer before a court action. Why? I have personally found that it has places me in a very favourable and advantageous position before the judge. I have experienced it for myself, seeing the judge favouring the party that made the WP offer over the party that caused a long unnecessary court sitting – that could well have been avoided had the WP offer been taken up. The loser will pay dearly – generally with costs plus interest too.
written by Richard Adams DCL5286 for First International Debt Collection