Virginia Memo regarding Settlement Negotiations
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How to fill out Memo Regarding Settlement Negotiations?
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FAQ
The Evidence Code prohibits the admission of settlement offers, demands, and negotiations to prove liability or viability of claims.
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.
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.
Confidentiality clauses in settlement agreements are the rule these days. Defendants want to avoid the bad publicity and do not want the reputation of being a soft target for marginal claims. Defendants typically have leverage to force plaintiffs into confidential settlements.
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.
