Settlement Privilege

This page was last substantively updated or reviewed January 2016. (Rev. # 95962)

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General Principles

Settlement privilege (or negotiation privilege) is a class privilege designed to promote settlement. It creates a prima facie presumption of inadmissibility. Any information disclosed under settlement privilege cannot subsequently be used against the accused. Exceptions include where the information is used "to rebut an allegation of prejudice at the hands of the Crown."

Purpose

The privilege is intended to "promote settlement" by wrapping a "protective veil" around their efforts to settle by ensuring the communications are inadmissible. The parties need the ability to have "full and frank discourse" in order for agreements to take place. Without protection, these discussions may not otherwise take place.

The privilege protects the public interest in favouring settlement. It "promotes the interests of litigants generally by saving them the expense of trial."

The disclosure of "without prejudice" communications has a tendency to promote litigation.

Application

The privilege applies where the following criteria are established:

1. A litigious dispute must be in existence or within contemplation.
2. The communication must be made with the express or implied intention that it would not be disclosed to the court in the event negotiations failed.
3. The purpose of the communication must be to attempt to effect a settlement.

Where settlement fails the privilege is invoked and the communications cannot be used in the course of litigation. However, if a settlement is successful, the communications may be used to prove the existence of a settlement contract.

Courthouse hallway discussions concerning offers to settle and related discussions are prima facie privileged."

Discussions of possible admissions by defence counsel are protected by privilege.

Waiver

The privilege is possessed by both parties to the litigation and cannot be unilaterally waived by one party.

Without Prejudice Terms

The "without prejudice" common law rule renders communications "made in the course of ... negotiations" in admissible. This rule has been extended beyond simply documents and communications.

The use of the term "without prejudice" alone is not determinative of whether settlement privilege applies.

Use in Abuse of Process Motions

Settlement privilege applies to resolution discussions and is prima facie inadmissible on an abuse of process motion.

Exception

There is a broad exception to settlement privilege in cases where "justice ... requires it." The issue in excluding the privilege is whether there is "a competing public interest outweighs the public interest in encouraging settlement."

Exceptions

Possible exceptions to settlement privilege include:

1. Whether without prejudice communications have resulted in a concluded compromise agreement;
2. To show that an agreement apparently concluded between the parties during the negotiations should be set aside on the ground of misrepresentation, fraud or undue influence;
3. Where a clear statement made by one party to negotiations, and on which the other party is intended to act and does in fact act, may be admissible as giving rise to an estoppel;
4. If the exclusion of the evidence would act as a cloak for perjury, blackmail or other unambiguous impropriety, but such an exception should only be applied in the clearest cases of abuse of a privileged occasion;
5. In order to explain delay or apparent acquiescence in responding to an application to strike out a proceeding for want of prosecution but use of the letters is to be limited to the fact that such letters have been written and the dates at which they were written;
6. Whether the claimant had acted reasonably to mitigate his loss in his conduct and conclusion of negotiations for the compromise of proceedings brought by him; and
7. Where an offer is expressly made “without prejudice except as to costs”.

Plea Negotiations

Communications regarding plea negotiations fall under the category of "public interest privilege" and so cannot be used in court. This includes negotiations regarding bail hearing as well as sentencing hearings.

This privilege exists to permit "frank and full discussions between counsel for the accused and counsel for the Crown."

This kind of privilege cannot be waived by one party alone.

It is prudent to set "terms of engagement in advance of negotiations" so the documents and reports provided to the other side pursuant to settlement negotiations will not be used for any other purpose.

See Also

• Privilege
  • Solicitor-Client Privilege