The inclusion of 'without prejudice' is often used where a Party intends for a document or meeting to be issued or held with the purpose of making these privileged whereby the parties are able to speak freely on the premise that these documents or discussions may not be used in legal proceedings as evidence or submissions against them.
Problems can arise where a dispute is not resolved and agreement could not be reached resulting in the matter being referred to a third party for resolution, e.g. an Adjudicator, and where one Party, makes reference to or includes these within their submission. The question then arises as to whether these are privileged and thereby not admissible and should be dismissed. The fact that a document states "without prejudice" does not in itself confirm privileged entitlement and if the third party considers that there was not a genuine attempt to settle a dispute or that such inclusion is not used to prejudice the position, then these would become admissible at the detriment of those who relied up on this privilege when such documents or meetings were initiated, and thereby harming their case; it is therefore imperative that careful consideration is given in drafting any document or conducting a meeting.
Where any submissions are found to be privileged, the fact that they have been put forward could possibly unwittingly influence the independent Party again damaging your case.