We are often asked whether the negotiation process in divorce is admissible in the proceeding. “If I agree to take the house at $400,000, will that bind me if we can’t close on that number and the case goes to trial?” “If we said we would take 30 months of alimony at $3,000 can I demand more later if my spouse does not accept?” The answer to both questions is yes. Negotiation is meant to be an open set of transactions and one is not bound until a contract (offer and acceptance) is reached. Furthermore, in order to encourage these kinds of negotiations, the Rules of Evidence forbid the introduction of what proposals were made during negotiations. Thus if my client says: “Dear husband, I will buy out your interest in the house at $400,000, if you will pay me thirty months of alimony at $3,000” the offer will not be admissible to prove that the house is worth $400,000.

But there are times when Courts will hear testimony about negotiations where the purpose is not so much to prove the terms of a negotiation as the fact that the negotiation was conducted in bad faith. The classic example is in the realm of custody. Many counties send the parties to mediation before a custody hearing is held. The mediation is supposed to be confidential; the rules say so. And this means that you can pretty much say what you want in mediation. But let us say that on Monday you go to mediation and you spend an hour or two negotiating over whether your spouse gets the kids Thursday to Sunday or Friday to Sunday. No settlement is reached. Five days later you are in Court. Your “court” position is that your husband is a drug addict and a pedophile. Unless you just learned of his wayward ways in the days between the date of the mediation and the court appearance, you will probably be asked pointedly how you were willing to agree to overnights on Monday at mediation when it was your official position that there were substance and sexual abuse issues hanging in the wings. The purpose of admitting this testimony is to show that you are an unethical negotiator willing to make false threats to advance your legal position. Not good.

This does not come up so much in the economic side of the divorce. It can in situations where a spouse offers to “take” an asset for one value but demand a completely different value for the same asset if he is “giving” it. The fun here usually revolves around household contents and their value. Let’s say husband has moved out and left most of the contents behind. In negotiation he asserts that the contents were worth $20,000. Wife counters saying that she will give him the contents in exchange for an additional $20,000 in cash or retirement. If husband rejects that proposal, the offer may be used to show that attorney’s fees and time were wasted on frivolous negotiations. It does not however, help us determine the value of the contents.

One other point should be considered that does not have to do with the law but the ethics of negotiation. Negotiation is intended to narrow issues. As issues narrow, doors should start to close. Wife wants 62% of the assets. Husband offers 52%. Wife wants 4 years of alimony. Husband offers two. For purposes of trial, no one is bound by these assertions. But if Wife’s next offer is that she wants 62% and five years of alimony, and I am husband’s counsel, I stop the train and announce that my client and I are getting off. The only credible basis to increase a demand during the negotiation process is if there is new information that makes the reversal of position fair or appropriate. If wife discovers that she has a health condition, that might justify negotiating backwards and increasing her demand. But absent new information, a party should recognize that in negotiation, as issues and positions narrow, one cannot go backward without losing credibility and putting your lawyer in a similar position. This problem often arises in negotiations over property in tandem with alimony. It often occurs that months will be spent working out an asset split. When agreement is finally reached, one party re-opens the door and suggests that it is now time to discuss alimony. The other party responds that the whole basis of making a disproportionate split of assets was premised upon the fact that there would be no alimony. If alimony or counsel fees are going to be part of the negotiation, get those terms “on the table” early in the process so time is not wasted creating a false hope that settlement is near.