Michigan

Can Offers of Settlement Be Used Against an Opponent in Michigan Court Proceedings?

Many times during hotly contested litigation, settlement offers are made. But, when the parties are unable to resolve their differences, it is not uncommon for one or both parties to want to use the other party's settlement offer as evidence that the other party knows it did something wrong.

However, under Michigan Rule of Evidence 408, settlement offers cannot be used in that way. Specifically, Michigan Rule of Evidence provides that "Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount."

This rule means that evidence of actions or statements that are made in the course of settlement negotiations are not admissible either.

However, this rule does not require the exclusion of evidence that would otherwise be discoverable simply because it was presented during the course of settlement negotiations. Neither does rule require excluding evidence presented during settlement negotiations when the party offering the evidence does so for another purpose, such as proving the bias or prejudice of a witness, countering an accusation that they caused undue delay in the case, or providing proof of an attempt to obstruct a criminal prosecution or investigation.

A Michigan business, business owner, or entrepreneur who is negotiating a settlement to any significant dispute should be represented by a Michigan business litigation lawyer to ensure that their legal rights are fully protected, not only in the negotiation itself, but also in subsequent legal proceedings that could arise later regarding the dispute or the negotiations to resolve the dispute.

Full post as published by Michigan Business Lawyer Blog on October 15, 2008 (boomark / email).