High Low Settlement Agreement for Hong Kong

High Low Settlement Agreement Template for Hong Kong

A High-Low Settlement Agreement is a specialized legal document used in Hong Kong's common law jurisdiction that establishes predetermined minimum and maximum settlement amounts in civil disputes. It provides a risk management mechanism where parties agree that the final settlement or judgment amount will fall within specified boundaries, regardless of the actual verdict or outcome. The agreement combines elements of Hong Kong contract law with civil litigation procedures, offering parties a way to limit their exposure while maintaining the possibility of a favorable outcome. It is particularly valuable in cases where liability is clear but damages are uncertain.

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What is a High Low Settlement Agreement?

The High-Low Settlement Agreement serves as a risk management tool in Hong Kong's legal landscape, particularly useful in civil litigation where parties seek to limit their financial exposure while preserving the opportunity for a favorable outcome. This document type emerged from the need to provide certainty in uncertain litigation situations, combining elements of traditional settlement agreements with boundaries on potential outcomes. It is commonly used in insurance-related disputes, personal injury cases, and commercial litigation where damages are disputed but liability may be clear. The agreement specifies a minimum amount that the plaintiff will receive even if they lose at trial, and a maximum amount they can receive even if they win a larger verdict. This structured approach aligns with Hong Kong's common law system and provides a sophisticated mechanism for risk allocation between parties.

What sections should be included in a High Low Settlement Agreement?

1. Parties: Identifies all parties to the agreement, including their full legal names and addresses

2. Background: Describes the underlying dispute, any existing legal proceedings, and the parties' intention to enter into a high-low settlement arrangement

3. Definitions: Defines key terms used in the agreement, including 'High Amount', 'Low Amount', 'Settlement Sum', and other relevant terms

4. Settlement Parameters: Specifies the agreed high and low limits of the settlement and the circumstances under which each would apply

5. Settlement Mechanism: Details the process for determining the final settlement amount within the agreed range

6. Payment Terms: Specifies the timing, method, and conditions of payment once the settlement amount is determined

7. Release and Discharge: Contains mutual releases and discharge of claims upon satisfaction of the settlement terms

8. Confidentiality: Sets forth obligations regarding confidentiality of the agreement terms and negotiations

9. Governing Law and Jurisdiction: Specifies Hong Kong law as governing law and jurisdiction for dispute resolution

10. General Provisions: Contains standard boilerplate clauses including entire agreement, amendments, and severability

What sections are optional to include in a High Low Settlement Agreement?

1. Insurance Provisions: Required when insurance companies are involved in funding the settlement

2. Tax Provisions: Include when there are significant tax implications that need to be addressed

3. Third Party Rights: Required when the agreement affects rights of parties not directly involved in the settlement

4. Interest Provisions: Include when interest calculations on the settlement amount need to be specified

5. Costs and Legal Fees: Include when addressing the allocation of legal costs and fees

6. Alternative Dispute Resolution: Include when parties want to specify mediation or arbitration for future disputes

7. Interim Payments: Required when partial payments are to be made before final settlement

What schedules should be included in a High Low Settlement Agreement?

1. Schedule 1 - Calculation Formula: Details the mathematical formula or methodology for calculating the final settlement amount within the high-low range

2. Schedule 2 - Payment Schedule: If applicable, provides detailed payment terms, installment amounts, and due dates

3. Schedule 3 - Related Proceedings: Lists all related legal proceedings that are affected by or relevant to the settlement

4. Schedule 4 - Supporting Documents: Lists key documents referenced in the agreement or relevant to the settlement

5. Appendix A - Form of Release: Contains the template for formal release documents to be executed

6. Appendix B - Settlement Notification Form: Template for formally notifying the final settlement amount once determined

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Hong Kong

Publisher

Genie AI

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Insurance

Healthcare

Construction

Manufacturing

Transportation

Professional Services

Financial Services

Real Estate

Retail

Maritime

Aviation

Energy

Relevant Teams

Legal

Risk Management

Claims

Compliance

Corporate Governance

Insurance

Dispute Resolution

Contract Management

Legal Operations

Treasury

Relevant Roles

Legal Counsel

Claims Manager

Risk Manager

Settlement Officer

Litigation Attorney

Insurance Underwriter

Compliance Officer

Chief Legal Officer

Claims Adjuster

Corporate Secretary

Legal Operations Manager

Dispute Resolution Specialist

Contract Manager

Chief Risk Officer

General Counsel

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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