Waiver of Settlement Privilege

October 13, 2009 Hull & Hull LLP Estate & Trust Tags: , , , , , 0 Comments

Settlement privilege excludes communications made in furtherance of settlement from the record.  Settlement is a fundamental component of our trial system for trite reasons.  Virtually every litigation proceeding has a parallel settlement component that the court does not and usually ought not to see, until after the main proceeding. 

In Re Hallman Estate, the applicant had filed an affidavit including a letter that was a settlement offer from respondent trustees.  The letter was marked "Without Prejudice".  The trustees brought a motion to expunge that part of the affidavit.  The applicant asserted that the trustees had impliedly waived settlement privilege by relying on the letter in exercising their discetion when, at a trustees’ meeting, they had discussed the letter then refused to pay trust income to the applicant, and later disclosed the minutes of the meeting to the applicant.  Also, the trustees sent a letter to the applicant’s counsel noting that the letter had been discussed and offering to provide redacted minutes.  The issue was whether this constituted implied waiver.

No waiver was found.  Settlement privilege can be waived expressly or by implication.  A clear intention is not always necessary.  The privilege can be waived by conduct (waiver by implication), even in the absence of intention, and one situation where this occurs is where fairness requires it (for instance, taking a position inconsistent with the maintenance of privilege).   

But here, it was the applicant asserting the waiver who first filed the Minutes referencing the letter, not the trustees relying on the privilege.  Second, the communication to the applicant’s lawyer of the reliance on the letter constituted confirmation of non-waiver, not the opposite.  Finally, there was no evidence the trustees actually did rely on the letter to exercise their discretion as trustees, only that they had discussed the applicant’s lack of reply to the letter during the meeting.  On this final point, the decision does not unequivocably state that such reliance would have been sufficient.        

The onus for proving waiver of the privilege rests with the party asserting the waiver, but that should not prevent litigants from fastidiously maintaining the privilege (as the trustees did in this case).

Have a great week,

Chris Graham

Christopher M.B. Graham – Click here for more information on Chris Graham.



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