Without prejudice injury claim offers - what are the risks?
Accepting a 'without prejudice' offer is often a straightforward way to conclude a personal injury claim - but what are the consequences in doing so?
In an injury claim, the pre-action protocol requires the Claimant to send a detailed ‘letter of claim'. This letter is usually sent by the claimant's solicitor, and is sent to the insurance company of the person or business responsible for causing the injury.
The insurer then has three months to either accept or deny liability. If they accept liability, negotiations for a settlement can begin. If the insurer denies liability, further action can be taken.
At any stage in the proceedings, the insurer may decide to make a ‘without prejudice offer'. This means the company wishes to settle the claim without admitting liability.
What is a ‘without prejudice offer'?
A ‘without prejudice offer' is a legal term which an insurer can use to settle a claim without formally admitting they are responsible for an accident, or the injuries sustained.
It indicates a willingness to co-operate and a desire to compensate the victim in lieu of further legal proceedings.
Any negotiations that take place as a genuine attempt to settle a claim are impliedly ‘without prejudice'. However, it is preferable for correspondence to be marked accordingly, or for clarification that proceedings are on a ‘without prejudice' basis before a call or meeting.
Being ‘without prejudice' means the offer cannot be used in court proceedings, such as evidence to indicate that the Defendant had admitted liability. The exception to this restriction would be where a ‘without prejudice offer' is not considered to be a genuine attempt to resolve a dispute.
How does the offer work in practice?
Correspondence regarding ‘without prejudice offers' often involves opening up two lines of communication:
- the ‘official' position of the defendant, which can be presented to the court in a subsequent hearing
- the ‘without prejudice' or ‘off the record' position where the dispute can be discussed frankly and settlement options agreed
Should a ‘without prejudice offer' be accepted?
Accepting an offer
The decision to settle and avoid further proceedings is desirable to many claimants.
In many cases, claimants require compensation to cover treatment, wages and other losses. Many claimants are less concerned about an admission of liability or an apology. In some cases, if the sum proposed in a 'without prejudice offer' is believed to be fair, acceptance can be the best course.
If an offer to settle ‘without prejudice' is accepted, this will end of the claim.
Where the offer is referred to as being made in ‘full and final settlement', this means that the offered amount covers the whole of the claim. If injuries develop or worsen after acceptance, requiring further treatment and other expenses, no further claims can be made.
Declining an offer
In certain situations, accepting may not be the best course of action. The sum may be insufficient to cover necessary healthcare costs and other losses.
Alternatively, the claimant may be specifically seeking an acknowledgement of liability from the defendant, or an apology.
There is some risk involved in refusing. By refusing an offer it does not mean that a claim will be successful in court.
The insurer and defendant have not admitted liability - and the ‘without prejudice offer' cannot typically be used as evidence of admission.
Making a 'without prejudice offer' does not necessarily mean that the insurance company feels that they have a weak case. Offers are often made irrespective of a case's chance of success in order to avoid future legal costs.
How should a decision be made?
It is recommended that claimants who have received a ‘without prejudice' settlement offer from an insurer speak with a qualified personal injury solicitor before making a decision.
It is particularly important that a medical examination is carried out before attempting to assess what compensation is appropriate for a claimant's injuries.
The solicitor can advise on the best course of action, based on the evidence and whether or not a better outcome could be achieved through court action.