Without prejudice negotiation workflow
Without prejudice protection is not a magic label — it depends on the purpose of the communication and the exceptions in s 131(2). Well-run negotiations use a tiered approach: open correspondence, without prejudice exchanges, Calderbank offers, and formal offers of compromise, each serving a different costs purpose.
This is an 8-step workflow for conducting settlement negotiations on a without prejudice basis under the common law rule and s 131 of the Evidence Act 1995 (Cth) / (NSW). It covers Calderbank offers and formal offers of compromise.
Before you start
- Signed costs agreement and conflict check
- Pleadings and current exposure analysis
- Client instructions on authority and walk-away position
- Costs budget and estimate to final hearing
The workflow
Scope the dispute and recovery analysis
Scope the claim, likely costs to judgment, enforcement risk, and reputational exposure. Without a clean view of each, a without prejudice offer cannot be set at the right number.
Agree the label: open vs without prejudice vs WPSATC
Agree the correct label for each communication. "Without prejudice save as to costs" (WPSATC) preserves costs arguments while keeping the substance privileged.
Draft the opening without prejudice offer
Draft an opening offer setting out the basis, the commercial terms, and a reasonable response time. Mark the letter clearly and include any standstill of limitation.
Apply the Calderbank structure
Apply the Calderbank structure — genuine offer, reasonable time to consider, consequences on costs identified — to preserve indemnity costs arguments if not accepted.
Consider a formal offer of compromise
Consider a UCPR offer of compromise for the automatic costs consequences, or the Federal Court equivalent under r 25.14. The offer has to comply with the prescribed form.
Prepare for mediation or settlement conference
Prepare a short mediation brief, position paper, and authority matrix. Rehearse opening and a sequence of positions.
Document agreement in binding terms
Document agreement in a short heads of agreement signed on the day, then a full deed of settlement. Deal with releases, payment, confidentiality, and no-disparagement.
Manage costs and performance
Manage implementation — payments, releases, consent orders, dismissal of proceedings. On default, enforce under the deed and address costs consequences of any prior offers.
What you will have at the end
A negotiated settlement recorded in a binding deed, with costs arguments preserved on any unresolved issues through a layered open/without prejudice/Calderbank/formal offer sequence.
Common issues
- Label confusion — "without prejudice" used where "open" was intended
- Calderbank offer without a reasonable time or clear consequences
- Formal offer of compromise not in prescribed form
- Settlement deed signed without clear releases and confidentiality
- Admissibility exceptions under s 131(2) overlooked
Run this workflow on a real matter
Quillio drafts the tiered offer sequence (open, WPSATC, Calderbank, formal offer), mediation position paper, and settlement deed. See /practice-areas/litigation-lawyers or start a free trial at /free-trial.
General guide only — not legal advice. Confirm current UCPR or Federal Court offer requirements at the time of service.
Try this workflow with Quillio.
Quillio can run this workflow on a real matter, with citations to current AU authority on every step. The free trial requires no credit card.
Start your free trial