SC RESOLUTION: Privileges Relating to Settlement Negotiations

By Rafael Atab, Chair of the ADR (Alternative Dispute Resolution) Committee

This year, the Standing Committee on Alternative Dispute Resolution (“ADR”) will be proposing a Resolution on the “without prejudice privileges” relating to settlement negotiations and compromise offers. Today, a Plenary Session will provide a forum for the discussion on potential harmonization of this topic. For example, should any statement or document exchanged during settlement negotiations be considered inadmissible in court? And should it not be allowed to use it without the express permission of both parties, and should it be immune from obligations (such as discovery obligations) to produce documents?

The Chair of the Standing Committee on ADR, Rafael Atab, outlines that “the public policy, in many jurisdictions, is to promote the out-of-court settlement of legal disputes, it being desirable to help parties avoid the costs, risks, burdens and uncertainties associated with litigation.” Indeed, these factors can be particularly substantial in IP disputes, especially those which span multiple jurisdictions, so that looking at potential harmonization of the above becomes an important issue.

Not surprisingly, all 16 reports received from AIPPI’s National and Regional Groups support the need for harmonization, though some Groups believe that harmonization should be focused on international and cross-border disputes. The Group Reports and Summary Report can be accessed via the AIPPI library at www.aippi.org.

Furthermore, in the reports all Groups support the view that documents and communications exchanged by parties during settlement negotiations should be subject to privilege, though several Groups believe that exceptions should also apply. This seems to reflect the general understanding that during attempts to negotiate a resolution of a dispute out of court, it is highly desirable for the parties and their legal advisers to be able to speak freely, propose compromises and be confident that the statements they make and information they provide to the other side will remain privileged and confidential. Still, in the reports most Groups express concerns about potential abuses of such privilege, and instances where the court could be misled, and therefore list exceptions that they believe should apply. However, the extent of such exceptions is expected to be a point of debate during the Plenary Session.

The draft resolution was the result of the work of a task force set up within the Standing Committee on ADR, in which members and observers from different jurisdictions joined forces to review, discuss and comment on the responses received, and share their own experiences. The working group was composed of Rafael Atab (BR, Chair), Steve Bauer (US, Vice Chair), Aurélia Marie (FR, Vice Chair), Sophie Lens (BE), Richard Price (UK), Petter Rindforth (SE), Jonathan Mesiano-Crookston (CA), and Paolina Testa (IT).

Following an informal online meeting organized prior to the Congress pursuant to this year’s Special Process, a revised draft resolution was circulated and will be further discussed during today’s Plenary Session chaired by Rafael Atab. Later this week, it will be presented to ExCo for approval.