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(2) When a court case is dismissed, or a court order is issued without prejudice, it means that a new case may be brought or a new order issued on the same basis as the dismissed case or the original order. See also with prejudice.
More importantly, marking a letter without prejudice means that it cannot later be admitted in evidence before a court or employment tribunal without the consent of both parties concerned, should settlement negotiations subsequently break down and the dispute come before the court or tribunal.