The WP rule is to encourage settlement discussions without parties weakening their position in the formal dispute. Basically, if this rule applies, people can speak and write openly without fear that what they are saying may be used against them in court or arbitration.
In the formal legal world, a court case that is dismissed with prejudice means that it is dismissed permanently. A case dismissed with prejudice is over and done with, once and for all, and can't be brought back to court. A case dismissed without prejudice means the opposite.
The 'without prejudice' privilege means parties to a dispute can make concessions and promises without fear that their words will be used later in court.
Communications marked as 'without prejudice' cannot be used by the other party as evidence in court. This means that parties can speak openly about the matters in dispute without the risk of the other party using that information against them later.
A judge may dismiss a case without prejudice in order to allow for errors in the case presented to be addressed before it is brought back to court. A judge will dismiss a case with prejudice if he or she finds reason why the case should not move forward and should be permanently closed.
“With prejudice” means the decision is final. “Without prejudice” means it's not final and subject to future inquiry. If the judge announces a case is dismissed with prejudice, that means it's permanently dismissed and can't be retried.
If you find the offer unacceptable, your attorney can draft a formal letter and propose a counteroffer. This letter should clearly state that the initial offer is unacceptable and refute any inaccuracies in the insurance adjuster's statements.
Always reject a settlement offer in writing. Type a letter to your contact at the insurance company listing the reasons you think that their offer is too low. Back up these reasons with concrete evidence attached to the letter. Finally, provide a counteroffer of a sum you think is more reasonable.
However, refusing a settlement offer does extend the life of your claim and delays when you receive compensation. If you have pressing medical bills or other expenses, this is a factor to consider. You'll also need to invest more time and energy into your case, including providing more documentation of your damages.
There is no particular magic in the words “without prejudice” in a letter. The substance of the communication will be considered to determine if it forms part of genuine negotiations for the settlement of a dispute.