They sent a without prejudice offer. What should you do next?
Why the label matters
When a letter is marked without prejudice, it usually means the sender is trying to settle without turning the negotiation into an admission against them. Under section 131 of the Evidence Act, settlement communications and documents are generally excluded from evidence, subject to exceptions. That is why the heading matters before you say anything back. ([legislation.gov.au](https://www.legislation.gov.au/C2004A04858/2025-06-10/2025-06-10/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))
If the dispute is in the Federal Court, Part 25 says an offer is taken to be made without prejudice unless the notice says otherwise. It also says a time-limited offer must stay open for at least 14 days after it is made, and the court is not to be told about the offer until acceptance, judgment or a permitted application. ([legislation.gov.au](https://www.legislation.gov.au/F2011L01551/2016-04-01/2016-04-01/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))
Read the offer like a deadline
Start with the basics: what amount is being offered, what claim it resolves, whether costs are included, and how acceptance must be sent. Federal Court rule 25.03 requires the notice to say whether costs are included or extra, and rule 25.04 says a money offer is, unless stated otherwise, payable within 28 days after acceptance. ([legislation.gov.au](https://www.legislation.gov.au/F2011L01551/2016-04-01/2016-04-01/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))
If the letter has a deadline, check whether it is workable before you do anything else. In federal proceedings, the time cannot be shorter than 14 days after the offer is made. That makes the timing important, because a rushed answer can lock in a position you did not mean to take. ([legislation.gov.au](https://www.legislation.gov.au/F2011L01551/2016-04-01/2016-04-01/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))
Source: Official guidance
Reply under the same heading
Answer in writing under the same settlement heading so the file stays clean. A short reply can say you accept, reject or want to counter, but it should stay focused on the deal rather than the fight. That helps keep the negotiation in the settlement lane and avoids confusion later. ([legislation.gov.au](https://www.legislation.gov.au/C2004A04858/2025-06-10/2025-06-10/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))
Do not rely on a phone call alone. Rule 25.06 says the court should not be told about the existence or terms of an offer until it is accepted, judgment is given, or a permitted application is made. Written replies create the record that will matter if the dispute hardens. ([legislation.gov.au](https://www.legislation.gov.au/F2011L01551/2016-04-01/2016-04-01/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))
Use a counter-offer with care
A counter-offer is worth considering if you want to move the matter without giving away more than necessary. The point is not to be clever. It is to show a realistic path to settlement, while keeping your own position clear. A sensible number is easier to explain than a vague one. ([legislation.gov.au](https://www.legislation.gov.au/F2011L01551/2016-04-01/2016-04-01/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))
Counter-offers can also matter on costs. Section 131 allows settlement material to be relevant to liability for costs, and Part 25 contains separate costs rules for offers that are not accepted. That does not make every negotiation email fair game on the merits, but it does mean the paper trail can have later value. ([legislation.gov.au](https://www.legislation.gov.au/C2004A04858/2025-06-10/2025-06-10/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))
Keep everything in writing
Save the offer, your reply, any revised figures and the deadline in one folder. If the dispute keeps moving, keep each new message under the same thread or heading. The aim is simple: a clean timeline that shows what was offered, when it was sent and how you responded. ([legislation.gov.au](https://www.legislation.gov.au/C2004A04858/2025-06-10/2025-06-10/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))
Today, read the deadline, decide whether to accept or counter, and write back before the offer expires. If you want help shaping the response or planning the next step, call CRP today about dispute resolution. CRP coordinates independent qualified professionals and can help you organise the process without promising a result. ([legislation.gov.au](https://www.legislation.gov.au/F2011L01551/2016-04-01/2016-04-01/text/1/epub/OEBPS/document_1/document_1.html?utm_source=openai))