Michigan Memo regarding Settlement Negotiations
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How to fill out Memo Regarding Settlement Negotiations?
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FAQ
Rule 408 as submitted by the Court reversed the tradi- tional rule. It would have brought statements of fact within the ban and made them, as well as an offer of settlement, inadmissible. The House amended the rule and would continue to make evidence of facts disclosed during compromise ne- gotiations admissible.
When the purpose of communication is to achieve a settlement, it is generally considered privileged, promoting open dialogue. However, the case of Progressive Holdings Inc v. Crown Life Insurance Co., provides two exceptions to this rule. First, once an agreement is reached, there is no need for privilege to continue.
Confidentiality protection in settlement negotiations comes from Evidence Code Section 1152. Section 1152 states that evidence of a compromise or offer of compromise is inadmissible to prove liability for loss or damage. The protections of Section 1152 extend to conduct and statements made in negotiation of an offer.
At preliminary examinations in criminal cases, hearsay is admissible to prove, with regard to property, the ownership, authority to use, value, possession and entry.
Some negotiations are more sensitive than others, so all parties should be clear at the outset about information that should be kept confidential. A confidentiality agreement (sometimes known as a non-disclosure agreement) should be signed before giving away any business sensitive information.
While courts give an expansive reading to Rule 408, they generally find settlement agreements discoverable and admit them and certain settlement communications into evidence in a variety of unexpected situations.
The Court first reiterated that settlement communications are not privileged. Instead, the inquiry must focus on California Code of Civil Procedure section 2017.010--i.e., whether the information is relevant or reasonably calculated to lead to the discovery of admissible evidence. Id.
Federal Rule of Evidence 408 provides security for parties by prohibiting settlement offers, or other statements made during settlement negotiations, from being admitted as evidence to prove the validity or amount of a claim in dispute.
