High Low Settlement Agreement

High Low Settlement Agreement

When a lawsuit or legal dispute arises, parties involved may seek to resolve the issue through a settlement agreement. One type of settlement that may be reached is a high low settlement agreement.

A high low settlement agreement is a legal agreement between parties that sets a range for the potential settlement amount. The agreement can provide a degree of certainty to both parties involved in the dispute, ensuring that there is a limit to the amount that could be awarded in either direction.

The high low settlement agreement establishes a minimum and maximum range for the settlement amount. If the outcome of the case is a judgment that is less than the agreed-upon minimum amount, the plaintiff will receive the minimum amount. If the outcome is a judgment that is higher than the agreed-upon maximum amount, the plaintiff will receive the maximum amount. However, if the judgment falls within the agreed-upon range, the plaintiff will receive the actual judgment amount.

A high low settlement agreement can benefit both the plaintiff and defendant. The agreement provides the plaintiff with a guaranteed minimum payment, even if the judgment is less than anticipated. On the other hand, the defendant can limit their exposure by capping the maximum amount they may be required to pay.

Additionally, a high low settlement agreement can be beneficial for insurance companies that cover legal disputes. An insurer can use this type of settlement to limit their liability to a known range, rather than taking on an unknown and potentially unlimited amount of liability.

Overall, high low settlement agreements can be a useful tool for resolving disputes in a manner that provides certainty to both parties involved. It can be particularly useful in cases where the outcome is potentially uncertain, such as in complex legal cases or those that involve unpredictable juries. By agreeing on a range for the settlement amount, both parties can have peace of mind knowing that there is a limit to their potential financial liability or award.

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