Offers to settle a lawsuit prior to litigation cannot be used by either party to prove liability.
According to the Supreme Judicial Court in Zucco v. Kane, 439 Mass. 503,
Both the acceptance of a settlement offer and the offer itself are inadmissible to prove or disprove a defendant’s liability. This evidentiary rule is designed to encourage settlements by limiting the collateral consequences of a decision to compromise.
However, admissions made during settlement negotiations are admissible if the dispute goes to trial. In the case cited the Court also held that
the rule does not extend beyond the fact of the settlement itself; admissions do not become privileged simply because they happen to be appended to a settlement.
Finally, litigants cannot use settlement offers to establish the amount of damages at issue. See Morea v. Cosco, Inc., 422 Mass. 601.
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