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Communications can be marked "without prejudice save as to costs". The label means that the standard without prejudice protection applies until the court delivers judgment. Once that has occurred, the court will turn to the question of awarding costs.
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. It's not dismissed forever.
As a brief reminder: without prejudice means that statements made in a genuine attempt to settle an existing dispute are prevented from being put before a court or tribunal as evidence against either party. The term subject to contract confirms that an offer is not binding until a contract is agreed.
This label is shorthand for "without prejudice to the writer's position if the terms this letter proposes are not accepted by you." It is used between parties who are in disagreement and allows them to enter into genuine negotiations to esolve their dispute without prejudicing their position.
It therefore prevents one party from bringing a claim on what was said in the pre-contract communications because, where a term is offered by one party without reference to further terms yet to be negotiated and agreed and that term is accepted by the other party, it can give rise to a legally binding settlement.