As a recent court case illustrates, in-house counsel need to take care when responding to demand letters:
It’s a common occurrence: counsel sends a demand letter to an employer explaining the basis for his/her client’s claim of discrimination or wrongful discharge, and threatening to sue, but offering to discuss settlement in advance of filing a complaint. In-house counsel responds by explaining why the claim has no merit, but expressing a willingness to discuss settlement, with the understanding that in the event of litigation the correspondence would be inadmissible under Evidence Rule 408 as a communication concerning settlement. It says so right in the Rule: “a statement made during compromise negotiations about the claim” is inadmissible “to prove or disprove the validity or amount of a disputed claim.” But the U.S. District Court for the District of New Jersey has reminded us that is not always the case.
[Read: Warning to in-house Counsel: Be Careful When Responding to Demand Letters at The National Law Review]