When conducting financial negotiations in divorce and civil partnership dissolution proceedings, negotiations often take place on a without prejudice basis.
What does “without prejudice” mean? The simplest way to think of negotiations described as being without prejudice is that they are off the record. Therefore, the court cannot be told about them.
The purpose of without prejudice negotiations is to allow the parties to discuss a possible settlement without the damage that a concession made by them in negotiations, designed to increase the chance of a settlement, might later be referred to in court and thereby damage their case. This is encouraged by the court, which is always keen for the parties to reach an agreement rather than to rely on the court to decide the dispute for them. As Winston Churchill is reputed to have said, “Jaw, jaw is better than war, war.” (It was actually Harold Macmillan).
In family cases, without prejudice negotiations are only possible in relation to financial disputes, not disputes about children. Without prejudice negotiations crop up in three main areas:
Without prejudice letters and discussions
Most financial proposals are put forward on a without prejudice basis. These offers cannot be disclosed to the court (save at a financial dispute resolution appointment – see below). Written offers tend to be more common than oral ones, except when you are negotiating at court or in a collaborative four-way meeting or a round table meeting. Negotiations in writing tend to be slower, but have the advantage of being precise and clear, whereas in oral negotiations, there is often the possibility of a misunderstanding or minor matters being missed, leading to further dispute and negotiations later.
Some solicitors have a habit of putting “without prejudice” at the top of every letter they send out. When that happens, my response is to point out that for a letter to be without prejudice, it needs to contain some proposals, If it does not – if it is not an attempt to compromise matters – then I am not prepared to regard it as being without prejudice. They shoud not be so bashful about their client’s case; they should proudly and openly put it forward.
Financial dispute resolution appointments
Normally, the judge cannot be told about any without prejudice offers. However, at a financial dispute resolution appointment (FDR) before a judge in financial remedy proceedings as part of a divorce or dissolution of a civil partnership, he or she is allowed to know about them.
The FDR is all about doing a deal. If the parties cannot reach an agreement, they ask for an indication from the judge of what the likely outcome would be if the case progressed to a final hearing. The judge usually gives the parties a little speech along the lines of:
“Mr and Mrs Bloggs, it would be much better if you reach an agreement today, because if you do not, then there will have to be final hearing in six months’ time where the judge will make a decision. The judge will not know about the without prejudice offers that you have disclosed to me today, but he or she will know what your incomes are and what your assets are worth, and I think that the court will make an order that the following happens…
Now you have heard my indication of the likely outcome, go outside with your lawyers and carry on negotiating”.
The judge will have been told about the without prejudice offers made by the parties. The vast majority of cases settle at the FDR once they have received the indication from the judge.
If agreement still cannot be reached at the FDR, the judge cannot impose a outcome. The case then progresses to a final hearing before a different judge who is unaware of the without prejudice offers made by the parties. Proceeding to a final hearing in the hope that the trial judge makes a different decision to that predicted by the FDR judge is a brave move. The judge does have enormous discretion, and it is possible that you may get a different outcome, but it is far from guaranteed.
Mediation and collaborative law
The parties may choose to use mediation or collaborative negotiations to reach an agreement. These discussions are always regarded as being without prejudice.
In mediation, once the parties reach a deal, it is a proposed agreement. It is not legally binding at that stage. The parties should seek legal advice on the proposed deal, which will be summarised in a without prejudice Memorandum Of Understanding by the mediator. If they confirm that matters are agreed on that basis, their solicitors then do the necessary paperwork to obtain a financial consent order from the court, which reflets the terms of the agreement in a legally binding format.
In collaborative negotiations, the lawyers are fully engaged in the process throughout. Once the parties reach an agreement, the lawyers prepare the paperwork for the court’s approval.
There is another way in which without prejudice offers can be brought to the court’s attention. Offer letters are sometimes headed “Without Prejudice Save As To Costs”, sometimes called Calderbank offers (as they were first approved of in a case called Calderbank v Calderbank).
At the end of a disputed final hearing, a judge can be told about a Calderbank offer if one party has failed to beat the offer. In other words, if, say, one party offered the other party £250,000 to settle the case, and at trial, the that other party was awarded, say £225,000, then he failed to beat the offer. The judge can then be told about the offer and the winning party will argue that the losing party should pay the winning party’s costs from the date of the offer onwards.
However, Calderbank offers were largely abolished in divorce financial cases in 2006. In financial remedy proceedings, there is a presumption that the parties pay their own costs, unless they have been guilty of litigation misconduct (i.e. not complying with the court’s orders). They are still possible in disputes about property between unmarried cohabitants, as those cases are treated as civil proceedings, not the family proceedings, and take place in the County Court and High Court, rather than the Family Court.
Calderbank offers are still possible in certain financial cases in a divorces or dissolutions; e.g. where the court has to decide a preliminary issue (such as, does a third party have an interest in the family home), or should the husband pay maintenance pending suit/interim maintenance to the wife or in appeals etc. (Confusingly, these types of application are not financial remedy proceedings, and the presumption against costs orders does not apply).
In the latter stages of financial remedy applications, it is normal practice to put forward an offer on an open basis. It is not described as being without prejudice. Therefore, the court can be told about this offer. It may not happen until the end of the case when the court decides if one party should pay the other party’s costs. As it is an open offer, the judge can be told about it. Where one party has failed to beat the open offer, the court can decide if in the circumstances of the case, the losing party should have accepted the offer. If the offer should have been accepted, and the winning party has therefore had to incur significant unnecessary expense by going to trial, then the loser may be ordered to pay the winner’s costs.
Rule 9.27A Family Procedure Rules 2010 compels the parties to make an open offer 21 days after the date of an unsuccessful FDR or by such date as the court directs.
Rule 9.28 requires the parties to put forward a statement setting out their open positions shorty before a final hearing.
All of this begs the question; why wait until the late stages of the case? Why not make an open offer at an early stage?
People are reluctant to make open offers for fear that they will hear them being talked about during the hearing, and that this will prejudice their case as the court knows that they were prepared to accept less than they are seeking at the final hearing.
But, I would suggest, this fear is groundless. The court knows how negotiations work. You offer to accept less than you argue that the court will give you, in order to do a deal that avoids the risk and expense of court proceedings (particularly if it is likely that even if you persuade the court to give you what you seek, you won’t recover costs).
Offers invariably say that the party making the offer will accept £X, but if that is not accepted then the offer will be withdrawn and at court, he or she will instead argue that they should receive more. It is not likely to prejudice their case if the judge knows this. The judge will assume that they were very sensibly trying to avoid the need for contested proceedings, with all of the expense, risk and stress involved.
Therefore, without prejudice offers in financial remedy proceedings may make no sense whatever. Offers should be made on a open basis at an early stage.
18 January 2026
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