Providing Your Adversary With Information "For Settlement Purposes Only" Does Not Necessarily Make It So

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In Hudson Ins. Co. v. M.J. Oppenheim, 604411/05 (Sup Ct, NY County, May 25, 2010) ("Hudson"), Justice Bransten held that statements made in an expert consultant's report prepared in connection with settlement negotiations were not entitled to the usual protections afforded settlement communications and, therefore, were admissible at trial. The lesson to be learned is that attorneys and clients must be careful when disclosing information during settlement discussions, because otherwise admissible evidence is not rendered inadmissible merely because it was provided during settlement negotiations.

Section 4547 of New York's Civil Practice Law and Rules, entitled "Compromise and offers to compromise," generally provides that confidential settlement negotiations are inadmissible as evidence and thus cannot be used by or against your adversary at trial if negotiations break down. The Practice Commentaries to CPLR § 4547 state that the rule "is an adoption, in substantially identical language, of the original version of Rule 408 of the Federal Rules of Evidence." Vincent C. Alexander, Practice Commentaries, CPLR 4547 (McKinney’s 2007).

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