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Settlement agreements, explained.

Posted by Ramin Montakab | Aug 04, 2021 | 0 Comments

95% of personal injury cases settle before any lawyer steps foot into a Courthouse. What is a settlement and how can it be advantageous for your case? 

Settlement agreements are contracted by people and businesses after a complaint has been filed and discovery has been procured, but before a case ever goes to court. Trials can be exhaustive and expensive, both for attorneys and their clients. Therefore, settling a case can lead to a cheaper and oftentimes more effective outcome. 

However, drafting a settlement that both parties can agree to is not easy. While attorneys do not conduct formal trials in front of jurors in settlement cases, the majority of the casework still occurs behind the scenes. Here are a few key commonalities that many settlement agreements share. 

  1. Settlement agreements most often take the form of written terms and conditions, which both parties must sign to put into effect. Arrangements between parties are heavily disputed and can occur at any point in the process, up until the court hearing. They are complex and must align with both parties' best interests. Therefore, it can be difficult for both parties to come to an agreement, and some cases will never settle without court interference. 

  2. The main focus of these agreements are the terms--such as payment due to another party or an action to be performed or prevented. Terms are specific to each case and depend on both (a) the severity of the claims and (b) the evidence at hand.

  3. Another essential aspect of settlement agreements is the release of claims. Claims, or causes of action, are the initial reasons behind a complaint filed by Plaintiffs at the beginning of a case. Thus, a release of claims means letting go of the demands placed on Defendants. Usually, settlements also include a settlement covenant or a mutual agreement not to take legal action against the other party regarding settlement matters in the future. This settlement covenant protects businesses and individuals from future lawsuits and complications. 

  4. However, be careful not to confuse a release of claims with liability. Oftentimes in settlement cases, neither party admits liability, or responsibility, for the alleged actions on which the case is based. 

  5. Miscellaneous elements of a settlement may include a confidentiality and nondisclosure clause, where parties agree to maintain private payments, outside of the public record. Additionally, settlement recitals included at the beginning of an agreement serve to provide context and an introduction to the case for future readers. 

RTM Law has handled countless cases, and our experienced attorneys have the ability to navigate all forms of settlement. To find out if settlement is the right strategy for your case, contact Ramin Montakab (949) 287-4342 for a free 15-minute consultation. 

About the Author

Ramin Montakab

 Ramin T. Montakab has been in the legal industry since 2008, starting as a litigation consultant. His practice has primarily focused on business and real estate litigation. Mr. Montakab litigated at mid-size and national litigation firms, representing fortune 500 ...

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