High Low Settlement Agreement for the United States

High Low Settlement Agreement Template for United States

A High-Low Settlement Agreement is a risk-management tool used in U.S. civil litigation where parties agree to minimum and maximum settlement amounts regardless of the ultimate verdict or decision. This agreement, governed by federal and state civil procedure rules, provides certainty to both parties by establishing floor and ceiling recovery amounts while allowing the actual award to be determined through trial or arbitration. It combines elements of both settlement and litigation, offering protection against extreme outcomes while preserving the parties' day in court.

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What is a High Low Settlement Agreement?

The High-Low Settlement Agreement emerged as an innovative solution in U.S. civil litigation to manage risk and uncertainty in dispute resolution. This type of agreement is particularly useful when parties want to proceed with trial while limiting their exposure to extreme verdicts. It guarantees the plaintiff a minimum recovery (the 'low') while capping the defendant's liability at a maximum amount (the 'high'). Common in personal injury, medical malpractice, and insurance cases, it provides a middle ground between full settlement and unrestricted litigation. The agreement typically includes specific terms about payment timing, releases, and insurance carrier obligations.

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

1. Parties: Identification of all parties to the agreement, including insurance carriers if applicable

2. Background: Description of the underlying dispute and circumstances leading to the agreement

3. Definitions: Key terms used throughout the agreement, including High and Low amounts

4. High-Low Parameters: Specific details of the minimum and maximum recovery amounts

5. Payment Terms: Timing and method of payment based on the outcome

6. Release Provisions: Terms of mutual release upon settlement

7. Governing Law: Jurisdiction and applicable law

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

1. Confidentiality: Terms of confidentiality when parties wish to keep terms private

2. Insurance Provisions: Specific provisions related to insurance coverage when insurance companies are involved

3. Tax Provisions: Allocation of tax responsibilities when tax implications are significant

4. Alternative Dispute Resolution: Procedures for resolving disputes about the agreement when parties want to specify dispute resolution methods

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

1. Schedule A - Calculation Method: Detailed explanation of how the final settlement amount will be calculated

2. Schedule B - Payment Schedule: Timeline and structure of payments if applicable

3. Schedule C - Release Form: Standard form for release of claims

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

United States

Publisher

Genie AI

Cost

Free to use
Industries

Federal Rules of Civil Procedure: Key considerations include Rule 68 (Offers of Judgment) and general rules regarding settlement agreements and their enforcement in federal courts.

State-Specific Civil Procedure Rules: Varying requirements for settlement agreements across different state jurisdictions, including specific procedural rules for civil litigation settlements.

Contract Law: Fundamental elements including contract formation requirements, consideration, capacity to contract, and mutual assent between parties.

Insurance Law: Regulations concerning insurance company involvement, bad faith considerations, and policy limits, particularly relevant in personal injury cases.

Tax Law: IRS regulations regarding settlement payments, tax implications for all parties, and associated tax reporting requirements.

Alternative Dispute Resolution Laws: State-specific ADR requirements and regulations governing mediation and arbitration processes.

Specific Area Law: Laws pertaining to the underlying case type, such as personal injury, commercial law, product liability, or medical malpractice.

Statute of Limitations: Time limitations for both enforcement of the agreement and the underlying claims.

Professional Ethics Rules: Attorney ethical obligations, disclosure requirements, and professional responsibilities regarding client communication and representation.

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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