secret settlement offer

Russell Knight

Russell D. Knight has been practicing family law as a Chicago divorce lawyer since 2006. Russell D. Knight amicably resolves tough cases while remaining a strong advocate for his client’s interests.

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Are Divorce Settlement Negotiations Confidential In Illinois?

secret settlement offer

In the process of an Illinois divorce, the parties will often make settlement offers to resolve some or all of the issues in their divorce.

An offer isn’t a deal until the offer is accepted by both parties to the divorce. So, an offer of settlement in a divorce creates a vulnerability for the offeror: it lets the other party know the terms at which they will resolve the divorce case. With this knowledge in hand, the opposing party can counter-offer or even share the offer with the judge as an example of how unreasonable the offeror was.

Is there any confidentiality rule regarding settlement negotiations in an Illinois divorce?

Case law recommends that settlement negotiations are confidential.

“As a general rule, matters concerning settlements and negotiations are not admissible…Illinois courts cite two primary concerns in prohibiting the admission of such evidence: (1) an agreement to settle does not constitute an admission of guilt and is therefore irrelevant; and (2) admitting evidence of settlements and negotiations would contravene public policy by discouraging litigants from settling before trial.” Liberty Mutual Insurance Company v. AMERICAN HOME ASSURANCE COMPANY, INC., 858 NE 2d 530 – Ill: Appellate Court, 1st Dist., 4th Div. 2006 (Citations Omitted)

This is divorce, where there is no fault or guilt. So, the first argument for confidential settlements doesn’t hold. The second public policy argument is already bolstered by specific rules and laws outlined below. So, in the case of divorce this “general rule” is, arguably, not universally applicable.

When it comes to confidentiality, it is important to be certain what is confidential and what is not. In Illinois, some matters are definitely confidential while other matters only might be confidential.

Parenting Issues And Confidentiality In An Illinois Divorce

For issues regarding children the parties are required to exchange and file proposed settlements within 120 days of the filing of the divorce.

“All parents, within 120 days after service or filing of any petition for allocation of parental responsibilities, must file with the court, either jointly or separately, a proposed parenting plan.” 750 ILCS 5/602.10(a)

If something is filed in an Illinois court it will be public information that the judge, the opposing party and the public-at-large can inspect.

All records, dockets and books required by law to be kept by such clerks shall be deemed public records, and shall at all times be open to inspection without fee or reward, and all persons shall have free access for inspection and examination to such records, docket and books, and also to all papers on file in different clerks’ offices and shall have the right to take memoranda and abstracts thereof.” 750 ILCS 105/16(6)

So, proposals and settlements regarding children cannot be kept confidential in an Illinois divorce unless the parties are willing to agree not to file proposed parenting plans and merely exchange those plans privately. The court does not inspect to see if every case has a filed parenting plan and will likely only enforce this rule if one of the parties insists.

There is a big loophole that can allow the parties to negotiate regarding the children in complete confidentiality: if they negotiate with a therapist or counselor.

“All counseling sessions shall be confidential. The communications in counseling shall not be used in any manner in litigation nor relied upon by any expert appointed by the court or retained by any party.” 750 ILCS 5/607.6

I do not see why a negotiation regarding the best interests of a child could not or should not take place within the confines of a counselor’s office.  Or a counselor could merely be present during formal negotiations at one of the lawyer’s offices and the confidentiality of a “counseling session” would still apply.

Financial Settlement Offers And Confidentiality In An Illinois Divorce

The parties can agree to confidentiality between themselves regarding the financial aspects of the case. The agreement can be entered into independently or the agreement can be entered as an order with the court.

The parties can ask the court to insist on confidentiality of settlement offers through a protective order.

“Protective Orders. The court may at any time on its own initiative, or on motion of any party or witness, make a protective order as justice requires, denying, limiting, conditioning, or regulating discovery to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or oppression.” Ill. S. Ct. R. 201(c)(1)

This Illinois Supreme Court Rule really governs discovery not settlement offers but the difference between discovery and a settlement offer (which essentially organizes the discovered information) is minimal.

An Illinois divorce judge is likely to order a protective order if the agreement furthers settlement.

Again, the presence of a counselor would likely trigger the confidentiality requirement. But, it would be harder to argue that the counselor was truly counseling when the only matters at issue were financial.

Some Aspects Of Settlement Offers In An Illinois Divorce Are Automatically Confidential

Illinois Supreme Court Rule 408 has a very specific rule about not using settlement offers as evidence. This rule really applies to civil cases, like personal injury, where fault or negligence is often admitted, explicitly or implicitly, through a settlement offer.

“Evidence of the following is not admissible on behalf of any party, when offered to prove liability for, invalidity of, or amount of a claim that was disputed as to validity or amount, or to impeach through a prior inconsistent statement or contradiction:

(1) furnishing or offering or promising to furnish or accepting or offering or promising to accept a valuable consideration in compromising or attempting to compromise the claim; and

(2) conduct or statements made in compromise negotiations regarding the claim.” Ill. S. Ct. R. 408

It’s hard to imagine evidence in an Illinois divorce that would be “offered to prove liability for, invalidity of, or amount of a claim that was disputed as to validity or amount”

Illinois is a no-fault state for divorce so there is no liability. Additionally, there are no “claims” in a divorce but merely valuations of marital property, child support and maintenance amounts (although such valuations could be argued to be “claims” for this purpose).

But, a settlement offer could certainly contradict later testimony in a divorce case. Bringing up evidence that contradicts other evidence is called impeachment.

For example, In re Marriage of Toole, 273 Ill. App. 3d 607, 619 (Ill. App. Ct. 1995) the court said, “[w]e agree with Michael that the statement in the settlement offer contradicts a material point of Patricia’s testimony regarding whether the $44,000 from Michael’s parents was a gift or a loan and, therefore, should have been admitted into evidence for impeachment purposes.” 

But, Illinois Supreme Court Rule 408 doesn’t allow you to use settlement offers for impeachment purposes…unless that same evidence would have been found another way.

“This rule does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of settlement negotiations.Ill. S. Ct. R. 408

This rule also does not require exclusion if the evidence is offered for purposes not prohibited by subdivision (a). Examples of permissible purposes include proving a witness’ bias or prejudice; negating an assertion of undue delay; establishing bad faith; and proving an effort to obstruct a criminal investigation or prosecution.” Ill. S. Ct. R. 408

So, if the evidence from the settlement negotiations could have been discovered through independent’s still admissible. It is hard to imagine any evidence in a divorce that couldn’t be discovered independently.

The rule goes on to state “[t]his rule also does not require exclusion if the evidence is offered for purposes not prohibited by subdivision (a). Examples of permissible purposes include proving a witness’ bias or prejudice; negating an assertion of undue delay; establishing bad faith; and proving an effort to obstruct a criminal investigation or prosecution.” Ill. S. Ct. R. 408

So, the few things that couldn’t be proven via independent discovery such as bias or prejudice, aren’t protected by this rule. This rule doesn’t protect much!

Settlement Negotiations During Mediation In An Illinois Divorce

Unlike all the other negotiations, if it’s said in a formal mediation…it’s confidential in Illinois.

“Mediation communications shall be confidential and privileged, not subject to discovery or admissible in evidence in accordance with the provisions of the Uniform Mediation Act, 710 ILCS 35/1, et seq.” Cook County Rule 13.4(e)(ix)(a)

“Unless subject to the Open Meetings Act or the Freedom of Information Act, mediation communications are confidential to the extent agreed by the parties or provided by other law or rule of this State.” 710 ILCS 35/8

While mediation communications are not admissible in court, anything that’s revealed…that is later discovered can be admitted in court.

“Evidence or information that is otherwise admissible or subject to discovery does not become inadmissible or protected from discovery solely by reason of its disclosure or use in a mediation.” Cook County Rule 13.4(e)(ix)(a)

In sum, while it is in bad taste to bring up settlement negotiations to an Illinois divorce judge in pretrial or trial, the introduction of settlement negotiations as evidence in an Illinois divorce is at the discretion of the judge unless within the confines of mediation, in the presence of a counselor or previously agreed to and memorialized via court order.

If you’re worried about negotiating the terms of your divorce so that your offer doesn’t hurt you in the future, schedule an appointment with my Chicago, Illinois family law firm to speak with an experienced Chicago divorce attorney.