Terms to be aware of when signing a release.

When going through the process for your case, knowing the terms that are listed on all documents is important to understand. In almost all cases, you will be required to sign a document that includes a release of the fault party and the insurance company from further responsibility and liability for your claims against them, including past and present injuries, damages and losses sustained by you.  Essentially, if a settlement is reached and you sign a release, you will most likely not be able to bring any further claims against the at-fault party and/or the insurance company for the at fault party’s claim.

The following addresses some but not all of the terms that may be included:

  1. Settlement Amounts: This is the total for any and all injuries, losses, and damages relating to all of your claims against Defendant.


  1. Release of Claims: You will be releasing Defendant and all other parties listed in the release from further responsibility and liability for any claims you may have against them.  This includes all past and future injuries, damages, and losses sustained by you as specified in the Release.  Accordingly, you will not be able to bring any further claims against any of the parties listed in the Release.


  1. Indemnity and Hold Harmless: You may be required to agree to indemnify and hold harmless Defendant,  of and from all claims of any sort from any party claiming an interest, a lien, subrogation, or any other type of legal or equitable claim to the proceeds or any part of the proceeds paid in exchange for this release.  This specifically includes, but is not limited to,  health care and health insurance liens or subrogation claims, Medicare, Medicaid, other governmental liens or claims for medical or support services provided, or any other type of claim by any third party on the proceeds paid in exchange for this release.  The Release extends to and includes indemnity from all costs and attorneys’ fees that may be incurred by the released parties as a result of such claims by third parties.  You previously acknowledge that satisfaction of all such claims and liens is your obligation and further affirmatively stated that you have given appropriate notice to all holders of liens and subrogation interests concerning the compromise and settlement represented by the Release.


  1. Confidentiality: You may be required to not disclose the existence of release, terms of negotiations regarding the release, and the settlement amount paid.  When an inquiry is made about your claims against the defendant, you usually agree to state only that: “The matter has been resolved.”  There are exceptions such as addressing it with your accountant.  However, if you are compelled by a court to disclose settlement information to a third party, you typically agree to inform the defendant of this intended disclose.


  1. Attorneys’ Fees for Enforcement of Release: You may be asked to agree that if legal action is taken to enforce any provision in the Release, the prevailing party is entitled to its reasonable attorneys’ fees and costs.


  1. Tax Implications: You are responsible for any federal, state, and local tax liability relating to the payments made under the Release.  (We cannot advise you about tax issues and recommend that you speak to the appropriate accountant or attorney that practices in this area.)


  1. Jury Waiver: You are agreeing to waive the right to jury trial as to any litigation relating to the agreement.


  1. Court Approval of Settlement: In certain types of cases, the release is not effective until the Court has issued an order approving settlement and the lawsuit has been dismissed, with prejudice.


If you would like a FREE consultation about a case, please John Bales for help today.