Rule 408 Settlement Agreement

The political considerations underlying the rule do not come into play when attempting to induce a creditor to pay an amount owed, admittedly, for a valuation amount. McCormick 251, 540. Therefore, the rule provides that the claim is challenged in terms of validity or amount. The practical value of the common law rule has been significantly reduced by its iniquitability to the admission of facts, even if it was made during compromise negotiations, unless it has stated that it is “unprejudiced” or is related to the offer that it is inseparable from it. McCormick 251, 540-541. An inevitable effect is to impede freedom of communication in matters of compromise, including among lawyers. Another effect is to create controversy over whether a particular statement is within or within the protected area. These considerations contribute to extending the rule to evidence of behaviour or statements in the context of compromise negotiations, as well as to the offer or compromise itself. For similar provisions, see California Evidence Code 1152, 1154. The House of Representatives bill was designed to respond to the objection of executive agencies that a party could, in accordance with the rule proposed by the Supreme Court, present a fact during compromise negotiations, thereby preventing an opposing party from bringing that fact before the courts, when such evidence comes from independent sources. The Senate amendment expressly excludes this result. This rule renders, as has been reported, inadmissible evidence of the settlement or attempt to settle a disputed claim when it is offered as a concession of liability or an amount of liability. This rule is intended to encourage comparisons that would be discouraged if such evidence were admissible.

In addition, some courts have argued the discretion to prohibit the approval of supporting documents, even though one of the previous exceptions applies. These courts believe that such discretion should be exercised where the admissibility of the evidence would give rise to appalling settlement discussions or if the evidence was only marginal evidence.