Notes of Advisory Committee on Rules
As a matter of general agreement, evidence
of an offer-to compromise a claim is not
receivable in evidence as an admission of,
as the case may be, the validity or invalidity
of the claim. As with evidence of subsequent
remedial measures, dealt with in Rule 407,
exclusion may be based on two grounds. (1)
The evidence is irrelevant, since the offer
may be motivated by a desire for peace rather
than from any concession of weakness of position.
The validity of this position will vary as
the amount of the offer varies in relation
to the size of the claim and may also be
influenced by other circumstances. (2) a
more consistently impressive ground is promotion
of the public policy favoring the compromise
and settlement of disputes. McCormick §§
76, 251. While the rule is ordinarily phrased
in terms of offers of compromise, it is apparent
that a similar attitude must be taken with
respect to completed compromises when offered
against a party thereto. This latter situation
will not, of course, ordinarily occur except
when a party to the present litigation has
compromised with a third person.
The same policy underlies the provision of
Rule 68 of the Federal Rules of Civil Procedure
that evidence of an unaccepted offer of judgment
is not admissible except in a proceeding
to determine costs.
The practical value of the common law rule
has been greatly diminished by its inapplicability
to admissions of fact, even though made in
the course of compromise negotiations, unless
hypothetical, stated to be "without
prejudice," or so connected with the
offer as to be inseparable from it. McCormick
§ 251, pp. 540-541. An inevitable effect
is to inhibit freedom of communication with
respect to compromise, even among lawyers.
Another effect is the generation of controversy
over whether a given statement falls within
or without the protected area. These considerations
account for the expansion of the rule herewith
to include evidence of conduct or statements
made in compromise negotiations, as well
as the offer or completed compromise itself.
For similar provisions see California Evidence
Code §§ 1152, 1154.
The policy considerations which underlie
the rule do not come into play when the effort
is to induce a creditor to settle an admittedly
due amount for a lessor sum. McCormick §
251, p. 540. Hence the rule requires that
the claim be disputed as to either validity
or amount.
The final sentence of the rule serves to
point out some limitations upon its applicability.
Since the rule excludes only when the purpose
is proving the validity or invalidity of
the claim or its amount, an offer for another
purpose is not within the rule. The illustrative
situations mentioned in the rule are supported
by the authorities. As to proving bias or
prejudice of a witness, see Annot., 161 A.L.R.
395, contra, Fenberg v. Rosenthal, 348 Ill.
App. 510, 109 N.E.2d 402 (1952), and negativing
a contention of lack of due diligence in
presenting a claim, 4 Wigmore § 1061. An
effort to "buy off" the prosecution
or a prosecuting witness in a criminal case
is not within the policy of the rule of exclusion.
McCormick § 251, p. 542.
For other rules of similar import, see Uniform
Rules 52 and 53; California Evidence Code
§ 1152, 1154; Kansas Code of Civil Procedure
§§ 60-452, 60-453; New Jersey Evidence Rules
52 and 53.
Notes of Committee on the Judiciary, House
Report No. 93-650
Under existing federal law evidence of conduct
and statements made in compromise negotiations
is admissible in subsequent litigation between
the parties. The second sentence of Rule
408 as submitted by the Supreme Court proposed
to reverse that doctrine in the interest
of further promoting non-judicial settlement
of disputes. Some agencies of government
expressed the view that the Court formulation
was likely to impede rather than assist efforts
to achieve settlement of disputes. For one
thing, it is not always easy to tell when
compromise negotiations begin, and informal
dealings end. Also, parties dealing with
government agencies would be reluctant to
furnish factual information at preliminary
meetings; they would wait until "compromise
negotiations" began and thus hopefully
effect an immunity for themselves with respect
to the evidence supplied. In light of these
considerations, the Committee recast the
Rule so that admissions of liability or opinions
given during compromise negotiations continue
inadmissible, but evidence of unqualified
factual assertions is admissible. The latter
aspect of the Rule is drafted, however, so
as to preserve other possible objections
to the introduction of such evidence. The
Committee intends no modification of current
law whereby a party may protect himself from
future use of his statements by couching
them in hypothetical conditional form.
Notes of Committee on the Judiciary, Senate
Report No. 93-1277
This rule as reported makes evidence of settlement
or attempted settlement of a disputed claim
inadmissible when offered as an admission
of liability or the amount of liability.
The purpose of this rule is to encourage
settlements which would be discouraged if
such evidence were admissible.
Under present law, in most jurisdictions,
statements of fact made during settlement
negotiations, however, are excepted from
this ban and are admissible. The only escape
from admissibility of statements of fact
made in a settlement negotiation as if the
declarant or his representative expressly
states that the statement is hypothetical
in nature or is made without prejudice. Rule
408 as submitted by the Court reversed the
traditional 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 negotiations admissible. It thus
reverted to the traditional rule. The House
committee report states that the committee
intends to preserve current law under which
a party may protect himself by couching his
statements in hypothetical form [See House
Report No. 93-650 above]. The real impact
of this amendment, however, is to deprive
the rule of much of its salutary effect.
The exception for factual admissions was
believed by the Advisory Committee to hamper
free communication between parties and thus
to constitute an unjustifiable restraint
upon efforts to negotiate settlements--the
encouragement of which is the purpose of
the rule. Further, by protecting hypothetically
phrased statements, it constituted a preference
for the sophisticated, and a trap for the
unwary.
Three States which had adopted rules of evidence
patterned after the proposed rules prescribed
by the Supreme Court opted for versions of
rule 408 identical with the Supreme Court
draft with respect to the inadmissibility
of conduct or statements made in compromise
negotiations. [Nev. Rev. Stats. § 48.105;
N. Mex. Stats. Anno. (1973 Supp.) § 20-4-408;
West's Wis. Stats. Anno. (1973 Supp.) § 904.08].
For these reasons, the committee has deleted
the House amendment and restored the rule
to the version submitted by the Supreme Court
with one additional amendment. This amendment
adds a sentence to insure that evidence,
such as documents, is not rendered inadmissible
merely because it is presented in the course
of compromise negotiations if the evidence
is otherwise discoverable. A party should
not be able to immunize from admissibility
documents otherwise discoverable merely by
offering them in a compromise negotiation.
Notes of Conference Committee, House Report
No. 93-1597
The House bill provides that evidence of
admissions of liability or opinions given
during compromise negotiations is not admissible,
but that evidence of facts disclosed during
compromise negotiations is not inadmissible
by virtue of having been first disclosed
in the compromise negotiations. The Senate
amendment provides that evidence of conduct
or statements made in compromise negotiations
is not admissible. The Senate amendment also
provides that the rule does not require the
exclusion of any evidence otherwise discoverable
merely because it is presented in the course
of compromise negotiations.
The House bill was drafted to meet the objection
of executive agencies that under the rule
as proposed by the Supreme Court, a party
could present a fact during compromise negotiations
and thereby prevent an opposing party from
offering evidence of that fact at trial even
though such evidence was obtained from independent
sources. The Senate amendment expressly precludes
this result.
The Conference adopts the Senate amendment.