What Does "Without Prejudice, Save as to Costs" Mean?
In legal disputes, especially those involving property, employment and commercial contract, the way you word correspondence can carry significant legal weight. One commonly used phrase is “without prejudice, save as to costs.” But what does it actually mean, and how does it protect your position in a dispute?
What Does "Without Prejudice" Mean?
The phrase “without prejudice” is used when parties are negotiating a settlement or resolution of a dispute. It allows you to make offers, propose terms, or discuss compromises without those discussions being used against you later if the matter ends up in court or tribunal. The benefits of having without prejudice discussions includes:
protecting settlement negotiations from being admissible as evidence;
encourages frank discussion and compromise;
It can only be used when there's a genuine dispute and genuine attempt to settle.
Just writing “without prejudice” doesn’t magically protect your letter. The context and intention must be clear.
What Does "Save as to Costs" Add?
When the words, “without prejudice, save as to costs” it adds an important legal caveat.
This particular phrase essentially means:
The content of your offer cannot be shown to the court while it’s deciding liability (i.e., who wins).
However, it can be shown later after a decision is made when the court considers who should pay the legal costs.
This phrase is a strategic way to apply pressure in negotiations. If your offer is reasonable and the other side refuses it, they could end up paying your costs even if they win only marginally or get a worse result in formal legal proceedings.
When you say “without prejudice, save as to costs”, you’re telling the other party:
“This offer can’t be used to decide liability—but if we go to court and I win, I’ll show the judge this letter to argue that you should pay my legal costs.”
Courts and tribunals can penalise a party that rejects a reasonable offer, even if that party ultimately wins—but receives a worse result than what was offered.
So When Should You Use It?
Use “without prejudice, save as to costs” when:
You’re making a genuine settlement offer.
You want to protect your offer during negotiations.
You want the court to consider your reasonableness when determining costs if the dispute escalates.
Example in Conveyancing Dispute
Let’s say a buyer misses settlement due to finance delays. You (as the seller) makes an offer to extend settlement by three days to avoid termination, but include:
“This offer is made on a without prejudice basis, save as to costs.”
If the buyer refuses and later loses in court, your offer could be disclosed after judgment. The court may find they acted unreasonably and order them to pay your client’s legal costs.
Practical Tips
Label documents clearly and appropriately.
Ensure your offer is genuine and reasonable.
Keep records of all offers and responses.
Consider making formal offers under rule 353 (in QCAT) or Calderbank offers in other jurisdictions, where relevant.
Key Points
the term “Without Prejudice“ can’t be used in court during the dispute. “Save as to Costs” can be used after judgment to argue who should pay legal costs.
Using this phrase wisely can protect your client’s position and create cost consequences for the other party. If in doubt, always seek legal advice before sending correspondence in a live dispute.
Need Help With A Dispute?
At East Legal, we regularly advise clients on how to frame correspondence in a way that protects their legal position. Whether you're navigating a contract dispute, property settlement issue, or business negotiation, our team is here to guide you.
Let our experienced team of contract lawyers and property lawyers help you develop a strategic approach to protecting your business.