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Settlement Agreements and Releases: Some Common Features

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Settlement Agreements and Releases: Some Common Features

A vast majority of personal injury claims conclude by settlement. As opposed to a trial or arbitration, a settlement is a mutual agreement between both parties to settle a claim for a sum certain. Once Plaintiff and Defendant agree to a settlement figure, the next step is to sign a release. Defense attorneys typically draft a release and require the Plaintiff’s signature prior to sending any payment. A settlement agreement or release is meant to “release” the defendant of any liability in exchange for the monetary settlement figure. While every release is unique in some ways, they often include the following clauses:

  1. Plaintiff must agree to dismiss the lawsuit if one is pending.
  2. Plaintiff must agree that the settlement amount is full and final and that all attorney’s costs and fees, medical bills, liens, or any other amounts owed because of the claim are included in the settlement amount.
  3. Plaintiff must agree to satisfy all liens associated with the claim. This commonly applies to medical insurance or worker’s compensation insurance liens. In short, when a plaintiff brings a claim against a third party, the insurer that paid for his/her medical bills is often entitled to be reimbursed for the money spent on those injuries resulting from the personal injury claim. This clause forces the Plaintiff to agree that he/she is responsible for satisfying these liens from settlement funds.
  4. Defendant does not admit to any wrongdoing. Most releases include language that is essentially Defendant denying all liability. Nonetheless, despite this denial of fault or liability, defendant agrees to pay for Plaintiff’s injuries arising from this incident that was not their fault.
  5. Confidentiality: Defendants always want the settlement amount to remain confidential.
  6. Assumption of risk regarding injuries: Plaintiff’s must often acknowledge that the settlement is full and final, even if injuries prove to be more substantial than is known at the time of signing.
  7. Non disparagement: Plaintiffs are increasingly being asked to agree to non-disparagement clauses. These most commonly apply to medical facilities or providers and other businesses. These clauses typically require that Plaintiff not talk poorly about the Defendant in any forum, either public or private. In other words, the Plaintiff is prevented from leaving a bad review online, from publishing an article that speaks poorly of the Defendant, or from even saying negative things about the business to a friend or family member. These clauses must be carefully reviewed before signing. It is important that they do not apply retroactively as most Plaintiffs have already spoken poorly about the Defendant by the time the Release is ready to be signed, which is often years after the incident that is the source of the lawsuit.

Plaintiffs can and often do negotiate the terms of the release. The Rockafellow Law Firm has settled thousands of cases in the past forty-five years. We have watched Releases grow more complex and more detailed over the years, growing from one page to often twelve or more pages. It is important that Plaintiffs understand the terms they are agreeing to before they sign any settlement agreement or release.

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