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.
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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
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
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
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