The Basics of “Settlement Privilege”
Even those readers who have some experience with the litigation process may not have heard the term “settlement privilege” before. It refers to an evidentiary principle of Canadian law that helps promote settlement.
Settlement privilege is a rule of evidence that operates to render certain documents and communications inadmissible in court, whether during hearings or in the pleadings documents tendered by either of the parties to litigation. Specifically, it covers any communications that pertain to the parties’ efforts to settle their dispute – including certain formal settlement offers, pre-trial conference documents, settlement conference documents, and documents prepared for mediation.
The privilege covers all settlement discussions and communications in furtherance of compromise or settlement when litigation already exists, or even when it is only reasonably contemplated. It is irrelevant whether settlement is actually reached; the parties’ negotiations, whether successful or not, are all protected.
To summarize its parameters, it can be said that settlement privilege:
- Is a common-law rule of evidence that protects communications exchanged by the parties as they try to settle a dispute.
- Is specifically designed to promote settlement, by protecting the parties’ efforts to negotiate and reach settlement without needing to resort to litigation.
- Covers all aspects of settlement negotiations. This includes all offers and compromises made during negotiations, as well as the final settlement including the amount.
- Covers both parties; neither of them is free to disclose to the court (whether orally or in filed court materials) that they have made an offer, or received one.
- Can be waived – but not unilaterally. Both parties to the litigation must agree before any elements of their settlement discussions can be disclosed to the court.
With that said – and only where the “justice of the case requires it” – there are narrow exceptions to the general rule. The person desiring to override settlement privilege in the specific case must show that its core pro-settlement principles are outweighed by a competing public interest. These scenarios usually involve situations of alleged fraud, misrepresentation, or undue influence.
At its root, the fundamental premises behind settlement privilege are these:
- It allows the disputing parties to freely discuss and offer terms of settlement in an attempt to reach compromise; and
- It also ensures that admissions of liability – which are often part of settlement negotiations – are not admitted into evidence if the matter does go to court.
Without the protection of settlement privilege, the parties would rarely (if ever) enter into settlement negotiations at all.
If you are going through a separation or other family law related issues, to ensure you understand all of your options and rights, you do not need to wait and you can get started online with us today or get in touch with us.