Can a third party use a settlement agreement between two adversaries to prove the amount of an unsettled claim when there are more than two parties?

Can a third party use a settlement agreement between two adversaries to prove the amount of an unsettled claim when there are more than two parties?

• A. Yes, always.
• B. No, not when there are more than two parties.
• C. No, but it can prove liability.
• D. Yes, if the third party is a party to the action.

Answer: (B)

The main idea is Rule 408: evidence of settlement negotiations or a settlement itself is not admissible to prove liability for, or the amount of, a disputed claim. The goal is to encourage settlements without turning them into proof of fault or value in other cases. When there are more than two parties, a settlement between two adversaries speaks only to the dispute between those two. It does not establish or resolve the unsettled claim involving the third party, so it cannot be used to prove the amount of that third party’s claim. In other words, the settled agreement is not evidence that determines liability or the value of a separate, unsettled claim with a different party. The rule does not permit using such a settlement to quantify another, separate claim, even though more parties are involved. So a third party cannot rely on a settlement between two others to prove the amount of their own unsettled claim.

The main idea is Rule 408: evidence of settlement negotiations or a settlement itself is not admissible to prove liability for, or the amount of, a disputed claim. The goal is to encourage settlements without turning them into proof of fault or value in other cases.

When there are more than two parties, a settlement between two adversaries speaks only to the dispute between those two. It does not establish or resolve the unsettled claim involving the third party, so it cannot be used to prove the amount of that third party’s claim. In other words, the settled agreement is not evidence that determines liability or the value of a separate, unsettled claim with a different party. The rule does not permit using such a settlement to quantify another, separate claim, even though more parties are involved.

So a third party cannot rely on a settlement between two others to prove the amount of their own unsettled claim.