What’s a Personal Injury Settlement Agreement?
A personal injury settlement agreement is a legally binding contract that spells out the terms and conditions of a settlement reached between an injured person and the person or entity at fault for causing those injuries. Such agreements are utilized for a number of reasons, notably including:
In a personal injury case, the plaintiff is typically a private citizen seeking damages for an alleged harm caused by another, namely the defendant. A personal injury lawsuit may be filed in a number of venues, including state courts, tribal courts and federal courts , depending on the type of injury and circumstances surrounding the case. Personal injury lawsuits are usually based on claims of negligence, and settlements agreements are frequently commercial agreements with insurance companies.
Because there are costs associated with liability insurance — including administrative expenses and the costs of defending against claims — it can be far more cost-effective for an insurance company to pay a plaintiff a settlement than to defend a case in court. As a result, most personal injury cases are settled prior to trial, and these settlements are usually finalized with a personal injury settlement agreement.
Key Components of a Settlement Agreement Template
A personal injury settlement agreement template is a legal document created when an injured victim and the negligent party (or insurance provider) agree to a resolution for an injury claim. Any disputed issues connected to the liability and damages of a claim can be settled through a properly drafted settlement agreement. In the majority of cases, the injured victim opts for a settlement due to the various benefits that this type of resolution can provide. The injured victim is able to receive a fair settlement for his or her injuries in a timely manner that will provide sufficient funds to cover medical care and other expenses. This approach is typically beneficial to the parties involved, as it alleviates the lengthy process of the court system and the cost of litigation. To ensure that the settlement agreement is deemed binding by the state’s court, the agreement should provide at least the following: Parties – the personal injury settlement agreement template should provide the names of the parties. Settlement Amount – the document should clearly state the total amount of compensation that will be provided to the injured party. Legal Obligations – the agreement must include the specific legal obligations and liabilities of the parties involved. The purpose of a personal injury settlement agreement is to finalize the negotiations and agreements reached by the parties and remove the opportunity for future disputes connected to the injury claim.
Benefits of Using a Template
The use of settlement agreement templates offers several advantages over creating agreements from scratch. Perhaps most obviously, having a template available can save a significant amount of time. Set as a general boilerplate or placeholder agreement, a template agreement will make it easy to fill in the relevant facts before giving it to your client and the other party to review for approval. Hiring someone to create an entire agreement from scratch can be a costly venture, and if you already have a template used for other clients, then this is an expense that can be avoided. Further, by using a template, you can limit the risk of missed key provisions from otherwise-typical agreements, such as the tax implications on the payment of a settlement.
Common Provisions Found in a Settlement Agreement
Common clauses in settlement agreements include confidentiality agreements, release of liability and indemnification clauses. Many, if not most, personal injury settlements include confidentiality agreements whereby the injured party agrees to keep the terms of the settlement confidential (not divulge the settlement details to anyone). These confidentiality agreements are often unenforceable, however, if the agreement contains no time limit. Release of liability clauses are found in most personal injury and workers compensation settlement agreements. This clause releases the defendant or their insurance carrier from any and all liability associated with your claim. Indemnification clauses may require you to indemnify the insurance company from any liability they incur should the settlement agreement be found void. In such a situation, the defendant may seek to enforce a judgment against you for the settlement amount obtained from the insurer.
How to Use a Template for a Particular Case
While personal injury settlement agreement templates provide a solid foundation to work from, they may require customization to fit the particular circumstances of the case. For instance, when a plaintiff has pre-existing medical conditions, a provision may need to be included in the final settlement agreement specifying that the plaintiff is releasing the defendant from liability for any aggravation of those conditions, as well as other injuries. Such a provision may read: EXAMPLE: "The Plaintiff hereby releases and forever discharges all the Defendants, their insurers, employees, officers, servants, or agents, and all of the Defendants’ affiliates and subsidiaries, from any and all claims, including future claims, causes of action, rights and damages of any kind, known or unknown, that Plaintiff has, or may be found to have, arising out of or in any way connected with the Incident, including, but not limited to, those that are related to or arise from the pre-existing Medical Condition , or the risk of aggravation thereof." Another consideration that may require alteration of the settlement agreement template is the extent of the plaintiff’s injuries. If a case has a value of one million dollars, for example, the parties may want to consider whether to place a cap on the total amount of medical expenses that will be paid as part of the settlement in order for it to be clear to the plaintiff and the plaintiff’s attorney that any costs over that amount must be borne by the plaintiff. An appropriate provision in the settlement agreement template could read: EXAMPLE: "The Plaintiff further acknowledges that the Defendant has agreed to pay a total of [$XYZ] in medical expenses incurred by the Plaintiff, and that all expenses incurred by Plaintiff that exceed that amount will be the sole responsibility of the Plaintiff." Templates for the general form of the documents described above, as well as many others, are available without charge at www.SettlementAgreement.com.
Pitfalls to Avoid When Using Templates
Using a settlement agreement template carries the risk that the use of a template may not fit your needs. A template is a one-size-fits-all contract drawn up without knowledge of your specific situation.
Laws, statutes, and regulations can vary from one jurisdiction to another, and the language used in the template may conflict with state law. In some areas, for example, certain types of damages cannot be waived in a settlement agreement. If you settle before you have a chance to consult a lawyer, while it’s not impossible that the settlement agreement contains the correct language, it may be off enough that you are exposing either yourself or your family member, such as a child or senior, to liability. Without a thorough knowledge of pre-existing law, and how to properly apply it, a settlement agreement template can harm a party more than help it. A lawyer would avoid such an error, and save you the time and expense spent enforcing your rights in the future.
Settlement Agreement Template Samples
You can find downloadable personal injury settlement agreement templates in a variety of places, such as on legal forms websites and in personal injury law guides. These templates usually include a series of blanks for naming the parties involved and the consideration (a monetary sum) that has exchanged hands. You can also find examples by downloading sample settlement agreements from dispute resolution organizations. Use standard forms discussed above to ensure that your settlement agreement contains all the required legal elements.
Because disputing parties differ in their needs and desires, a generic personal injury settlement agreement template might not cover all your bases. Whether you’ve committed to an alternative dispute resolution process or you’re taking a case to court, consider hiring a lawyer to write your settlement agreement.
Here are some examples of what these settlement agreement templates look like:
Example 1:
SETTLEMENT AGREEMENT AND RELEASE
This SETTLEMENT AGREEMENT AND RELEASE (the "Agreement") is entered into on [Insert Date] between [Plaintiff Full Legal Name] (the "Plaintiff"), residing at [Plaintiff Address] , and [Defendant Full Legal Name] (the "Defendant"), residing at [Defendant Address]. The Plaintiff and Defendant may be collectively referred to herein as the "Parties."
Example 2:
CONCESSIONS
The Plaintiff and Defendant agree that: (i) Plaintiff does not intend to pay any judgment on the Defendant’s Counterclaim; (ii) no liens exist on the Property and Plaintiff need not and will not convey any interest in the Property in connection with this Settlement Agreement; (iii) this is an arms-length transaction; iv) neither Plaintiff nor Defendant has relied on any any representation of the other party or suffered any injury with respect to the execution of this Settlement Agreement; and (v) Defendant is not entitled to any other compensation, relief, or benefit from Plaintiff in connection with this Settlement Agreement.
Example 3:
RELEASES
Defendant hereby settles and releases any past, present, or future claims that he, his heirs, beneficiaries, guardians, successors, assigns, and insurers may have against Plaintiff and his/her respective agents, attorneys, employees, family members, and affiliates, arising out of the Litigation, and the Property, jointly and severally.