Admissibility of Settlement-Related Evidence at Trial

Many trial lawyers assume that evidence of settlement offers and negotiations can never be admitted at trial. There is a general belief that placing the legend “Settlement Communication” on correspondence and other documents somehow precludes those documents from ever being seen by a jury. The bar on admissibility of settlement-related evidence is not nearly that broad, however, and can lead to a trap for the unwary. Federal Rule of Evidence 408, which governs admissibility of settlement-related evidence, excludes such evidence only in certain circumstances. Moreover, Rule 408 expressly allows the use of settlement-related evidence for a number of reasons. This article examines the parameters of Rule 408 and some of the permissible uses of settlement-related evidence.