THE COURTS
[225 PA. CODE ART. IV]
Order Adopting Amendments to Rule 408; No. 236, Supreme Court Rules; Doc. No. 1
[30 Pa.B. 1642] The Committee on Rules of Evidence has prepared a Final Report explaining the March 10, 2000 changes to Rule of Evidence 408, effective July 1, 2000. These changes bring Pa.R.E. 408 in line with F.R.E. 408 by abolishing the common law rule and making it clear that evidence of conduct or statements made in compromise negotiations is not admissible to prove liability for or the validity of a claim or its amount. The Final Report follows the Court's Order.
Order Per Curiam:
Now, this tenth day of March, 2000, upon the recommendation of the Committee on Rules of Evidence; this proposal having been published before adoption at 29 Pa. B. 2264 (May 1, 1999) and a Final Report to be published with this Order:
It Is Ordered pursuant to Article V, Section 10 of the Constitution of Pennsylvania that Rule of Evidence 408 is hereby amended as follows.
This Order shall be processed immediately in accordance with Pa.R.J.A. 103(b), and shall be effective July 1, 2000.
Annex A
TITLE 225. RULES OF EVIDENCE
ARTICLE IV. RELEVANCY AND ITS LIMITS Rule 408. Compromise and Offers to Compromise.
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. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require the exclusion of [an admission of fact] any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations. This rule also does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigaton or prosecution.
Comment This rule is [similar] identical to F.R.E. 408. [Contrary to its federal counterpart, however, Pa.R.E. 408 does not bar the use of all statements and conduct occurring during settlement negotiations. In this respect, the rule is consistent with Pennsylvania law that distinct admissions of fact made during settlement discussions are admissible. See Rochester Machine Corp. v. Mulach Steel Corp., 498 Pa. 545, 449 A.2d 1366 (1982) (plurality); Heyman v. Hanauer, 302 Pa. 56, 152 A. 910 (1930); Hammel v. Christian, 416 Pa. Super. 78, 610 A.2d 979 (1992).]
The 2000 amendments abolish the common law rule that distinct admissions of fact made during settlement discussions are admissible, see Rochester Marine Corp. v. Mulach Steel Corp., 449 A.2d 1366 (Pa. 1982) (plurality), bringing Pennsylvania in line with F.R.E. 408 and most of the states.
The 2000 amendments are consistent with the Mediation Act of 1996. See 42 Pa.C.S. § 5949 (Confidential mediation communications and documents).
Like the federal rule, Pa.R.E. 408 permits evidence relating to compromises and offers to compromise to be admitted for purposes other than proving liablity, such as showing bias or prejudice. See Heyman v. Hanauer, [302 Pa. 56,] 152 A. 910 (Pa. 1930) (if proposal was offer to settle, it could have been used to impeach witness).
Pa.R.E. 408 is consistent with 42 Pa.C.S. [A.] § 6141 which provides, in pertinent part, as follows:
§ 6141. Effect of certain settlements
* * * * * See Hatfield v. Continental Imports, Inc., [530 Pa. 551,] 610 A.2d 446 (Pa. 1992) (evidence of ''Mary Carter'' agreement admissible to show bias or prejudice, and not excluded by § 6141(c)).
Under Pa.R.E. 408, as under F.R.E. 408, evidence of offers to compromise or completed compromises is admissible when used to prove an effort to obstruct a criminal investigation or prosecution. This is consistent with prior Pennsylvania case law. See Commonwealth v. Pettinato, [360 Pa. Super. 242,] 520 A.2d 437 (Pa. Super. 1987). Pa.R.E. 408 does not permit, however, the use of evidence relating to good faith compromises or offers to compromise when made for the purpose of reaching an agreement such as those sanctioned by Pa.R.Crim.P. 314 (relating to dismissal of criminal charges not committed by force or violence upon payment of restitution) or Pa.R.Crim.P. 145 (relating to dismissal upon satisfaction or agreement). The court may need to conduct, out of the hearing of the jury, a preliminary inquiry into the circumstances surrounding compromises in criminal matters to determine whether to permit such evidence.
Official Note: Adopted May 8, 1998, effective October 1, 1998; amended March 10, 2000; effective July 1, 2000.
Committee Explanatory Reports:
Final Report explaining the March 10, 2000 amendments concerning the inadmissibility of evidence of conduct or statements made in compromise negotiations published at 30 Pa.B. 1643 (March 25, 2000).
FINAL REPORT1
Amendment to Pa.R.E. 408
Compromise and Offers to Compromise On March 10, 2000, upon the recommendation of the Committee on Rules of Evidence, the Supreme Court adopted amendments to Rule of Evidence 408 (Compromise and Offers to Compromise), effective July 1, 2000. The amendments bring Pa.R.E. 408 in line with F.R.E. 408 by abolishing the common law rule and making it clear that evidence of conduct or statements made in compromise negotiations is not admissible to prove liability for or the validity of a claim or its amount.
The Committee undertook a review of this rule after receiving correspondence contending that Rule 408 is a ''trap for the unwary'' because it inhibits talking freely in order to promote settlement, and contributes to malpractice actions against lawyers who make damaging statements because they do not say ''Hypothetically speaking'' prior to any compromise discussions. The correspondents suggested that Rule 408 be amended to parallel F.R.E. 408 and the other states that have similar rules or statutes.2
As the Committee evaluated the points raised in the correspondence, the members noted that the Mediation Act, which was passed in 1996 after the Ad Hoc Committee on the Rules of Evidence had completed its work on Rule 408, provides ''Mediation communications and mediation documents shall not be admissible as evidence in any action or proceeding . . . ,'' see 42 Pa.C.S. § 5949, thereby abrogating the common law rule for proceedings covered by the Act. The experience of the members of the Committee has been that the provisions of the Act are logical and work well. Furthermore, the Committee noted that most states have some form of a mediation act, and several of them have included provisions in their rules or statutes concerning the admissibility of statements made during mediation.
Based on their experiences concerning compromise negotiations, the Committee members acknowledged that there are many situations in which an attorney will agree with opposing counsel to conduct their state settlement negotiations under the federal rules. This is a common method by which attorneys circumvent the common law and alleviate the necessity to state ''Hypothetically speaking'' prior to settlement discussions.
Based on the foregoing considerations, the Committee agreed that Pennsylvania evidence law should be aligned with F.R.E. 408. Accordingly, Pa.R.E. 408 has been amended by adding ''Evidence of conduct or statements made in compromise negotiations is likewise not admissible'' after the first sentence, and by replacing the phrase ''any admission of fact'' with ''any evidence otherwise discoverable.'' These changes abrogate Pennsylvania's adherence to the common law under which such conduct or statements are admissible, and make it clear that evidence of conduct or statements made in compromise negotiations is not admissible to prove liability for or invalidity of a claim or its amount. Correlative revisions have been made to the Comment.
[Pa.B. Doc. No. 00-519. Filed for public inspection March 24, 2000, 9:00 a.m.] _______
1 The Committee's Final Reports should not be confused with the official Committee Comments to the rules. Also note that the Supreme Court does not adopt the Committee's Comments or the contents of the Committee's explanatory Final Reports.
2 The Committee examined the rules and statutes in several other jurisdictions and found that Pennsylvania is the only state that continues to follow this common law principle.
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