• Don’t Forget to Negotiate the Nonmonetary Terms of Your Settlement Before You Reach a Final Settlement
  • February 20, 2015 | Author: Betsy G. Ramos
  • Law Firm: Capehart & Scatchard, P.A. - Mount Laurel Office
  • Often parties are so focused on the monetary terms of a settlement, that they forget that there could be material nonmonetary terms that are important as well. Once a monetary offer is made and accepted, unless it has been made clear that there are other terms that are required to reach a final settlement, the other party could legitimately take the position that a final settlement has been reached and could move to enforce the settlement as binding - without those nonmonetary terms being included.

    Some standard nonmonetary terms that are typically included in a personal injury settlement include the following:

    • Blanket release
    • Child support judgment search
    • Lien documentation
    • Medicare conditional payment letter
    • W-9 of plaintiff’s attorney

    When the offer is conveyed, there should be a discussion of the closing documentation that will be required to effectuate the settlement to avoid a dispute over whether these documents are required to complete the settlement.

    Sometimes a party desire that a certain form of release be used, additional parties be added to the release (such as an insurance carrier or a parent or subsidiary of the named party), or a narrow release be used (such as a release only as to certain claims and not a blanket release). If other than the boilerplate form of release is desired, any special language must be negotiated before a final settlement is reached.

    Parties also need to consider whether they want a settlement agreement to memorialize the settlement - not just a release. If so, that needs to be made clear to the opposing counsel when the offer is conveyed - that the offer is subject to memorialization in a written settlement agreement.

    Other nonmonetary terms that should be considered in a negotiating a settlement, depending on the type of case, include:

    • Venue and jurisdiction clause (if a dispute arises over the settlement, what court would have jurisdiction to resolve the dispute?)
    • When is the settlement check due?
    • Are attorney’s fees being released? (This should always be addressed in any nonpersonal injury release.)
    • Nondisparagement clause
    • Tax treatment of settlement monies paid
    Last, and often very important to a defendant, is whether the settlement must remain confidential. A confidentiality provision is a material term that must be negotiated before a final settlement is reached. And, from a practical standpoint, it should be conveyed with the first offer. If it is not mentioned until the end of the negotiations, the plaintiff may have already discussed the offer with third parties and a confidentiality provision will not be as effective.

    The point of this article is that often there are nonmonetary terms to a settlement that are very important to a party. They should be discussed and negotiated at the same time as the monetary terms or they may end up not included in the settlement.