What does 'without prejudice' mean when I send a settlement offer in Ontario?

"Without prejudice" is a label used on settlement communications to signal that the communication cannot be used as evidence in court if negotiations fail. The purpose is to encourage frank settlement discussions: parties can make offers or admissions freely without worrying that the other side will use those communications against them at trial.

In Ontario, the without prejudice protection is recognized by the courts, but it is not absolute. A communication must genuinely be made in the context of settlement negotiations for the protection to apply — simply labelling a letter "without prejudice" does not automatically make it inadmissible. Courts can look past the label if the communication was not genuinely part of settlement discussions.

There are also exceptions: courts can look at without prejudice communications for limited purposes, such as determining whether a settlement was actually reached, or in rare cases where excluding the evidence would cause serious injustice. The protection generally covers written and oral communications during negotiations. Your lawyer can advise you on how to structure settlement communications to maximize protection.