Some attorneys use the phrase "protected by ER 408" as a force field, claiming protection for all statements and conduct in settlement negotiations from admission for any purpose. Such a broad claim is simply inaccurate.
Under the common law before the adoption of ER 408, offers of settlement were inadmissible to prove liability or the lack thereof.1 ER 408 not only codified the common law, but went further, by protecting conduct and statements made in compromise negotiations, which were previously admissible as admissions of a party opponent.2 The policy behind the rule change was to promote settlement by encouraging freedom of communication in negotiations.3
As the text of the rule itself indicates, ER 408 does not provide blanket protection of statements and conduct during settlement talks. Specifically, a party cannot claim protection under ER 408 for evidence that would be otherwise discoverable, simply because it was presented in settlement negotiations. Additionally, the evidence may be admissible for purposes other than proving liability, such as the bias or prejudice of a witness.
Importantly, the list of other purposes in ER 408 is not exhaustive and a party may successfully admit evidence for purposes not specified in the rule. For example, evidence from settlement negotiations has been admitted to establish the mental state of an employer in a discrimination action.4
In some cases, evidence is admissible by statute and ER 408 does not apply. To illustrate, pursuant to RCW 4.22.060(2), settlement agreements between a claimant and defendant are admissible when the relative fault of multiple parties is at issue for the purpose of offsetting the claimant's recovery against other parties.5
ER 408 also does not apply to criminal trials. Consequently, it does not exclude negotiations or compromises between a criminal defendant and victim.6
The federal rule, FRE 408, shares some similarities with the Washington rule and both share a similar purpose: to promote the compromise and settlement of disputes, by allowing the parties to candidly negotiate claims without worrying that their conduct or statements will be used against them to prove liability or the invalidity or amount of a claim.7 One important difference is that FRE 408 specifically disallows the admission of offers, conduct or statements to impeach a witness by a prior inconsistent statement.
Under the exceptions to FRE 408, evidence may be admitted for "another purpose" specified in the rule or for other purposes. Because the list of exceptions in the rule is not exhaustive, offers, conduct or statements made during settlement negotiations have been admitted to prove an insurer's bad faith,8 breach of a settlement agreement9 or jurisdictional requirements.10
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