“Without prejudice privilege” is one of those legal phrases everyone uses, but very few people truly understand. I spend a surprising amount of time explaining it to clients - not because they’re unfamiliar with the term, but because the protection it gives is far stronger than most people realise.
At its core, without prejudice privilege protects genuine settlement discussions from being used in court. If you’re trying to resolve a dispute, you should be able to speak openly, explore options, float figures, and test ideas without worrying that every word will later be weaponised. Without prejudice privilege creates that safe space.
If you want a simple overview of when to use without prejudice, I've written about that here. I’ve also written separately about why you should be careful with without prejudice letters, which covers the practical pitfalls.
A recent decision handed down last week - Henderson & McPherson v Ministry of Defence [2026] EWHC 2645 (SCCO) - is a timely reminder of just how robust the without prejudice rule is. The court described WP privilege as a “veil or cloak” over settlement discussions. Once that cloak is in place, the court will not lightly lift it.
There is an exception to without prejudice privilege: unambiguous impropriety. It’s the phrase people reach for when they feel the other side has been “unfair” or “misleading” during negotiations. But the case law is clear - and Henderson reinforces it - that this exception is deliberately difficult to satisfy.
The judgment put it plainly: “a discrepancy alone is not enough.”
That matters. It means:
Negotiations are fluid. Positions shift. People test the water. None of that lifts without prejudice protection.
The threshold is high. Courts reserve this exception for clear, serious misconduct - the kind of behaviour the without prejudice rule was never intended to shield.
Examples include:
This is not about being robust or strategic. It’s about conduct that is genuinely improper.
The court in Henderson emphasised that the exception is narrow for a reason: if without prejudice privilege could be lifted every time someone spotted an inconsistency, the protection would be meaningless. Settlement discussions would become cautious, defensive, and far less productive.
For most SMEs, the takeaway is simple: your settlement discussions are protected. You can negotiate openly, explore options, and adjust your position without fear that every line will later be dissected in court.
But it also means you need to be careful not to stray into territory that could be seen as improper. Without prejudice privilege is strong - but it is not a licence to mislead.
If you’re unsure how without prejudice privilege applies to your negotiations, or whether something should be marked Without Prejudice, I’m always happy to give early guidance. A quick conversation at the start can save a lot of difficulty later.
Legal disclaimer
The matters contained within this article are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law in England and Wales and should not be treated as such.
Whilst every effort is made to ensure that the information is correct, no warranty, either express or implied, is given as to its’ accuracy, and no liability is accepted for any errors or omissions.
Before acting on any of the information contained herein, expert advice should always be sought.
© Melissa Worth, October 2026