Category Archives: Settlement

SETTLEMENT AGREEMENT MEMORANDUM

It didn’t take me many mediations or settlement conferences to figure out that if I didn’t get  it in writing when the deal was made there would be problems. Call it buyers remorse or just lawyers being lawyers  there would be proposed revisions and issues raised we never discussed or had already resolved. If you allowed the other side or the mediator  to try to put the deal in writing it took too long and it opened the door to further discussions. As a result I prepared a form memorandum with copies that I had with me. As soon as there was verbal agreement I  would take the position it  wasn’t settled until the parties had signed my memorandum. This presented the other side with a written form that could be altered but only in writing and which prevented after thought controversy.

What follows is a basic memorandum which would have to be revised for whatever might be needed in your practice or jurisdiction, but which is simple, covers the major points and excludes after deal dickering. We have actually filed motions to enforce these memorandums on occasions when the defense wanted to back off of something or change it. Also, this form has no provisions  for  issues under Medicare, ERISA, Obmacare or specific lien or subrogation claims.  These would be added as needed.

SETTLEMENT AGREEMENT SUMMARY

The parties have agreed to settle this case on the following terms.  Settlement documents in conformance with this agreement will be prepared and signed by the parties in conformity with these provisions which are final.

1.         DEFINITIONS

1.1       “Plaintiff” refers to the persons claiming damages in this case. “Defendant” refers to the persons or legal entities against whom the claims are made.

2.         AMOUNT TO BE PAID 

2.1       Defendant shall pay plaintiff, in full settlement of all claims, the sum of

$                                                                                                                                                                

3.         MANNER OF PAYMENT 

3.1       This is a lump sum settlement to be paid by check or draft.

3.2       The check or draft shall be made payable to “Luvera, Barnett, Brindley, Beninger and Cunningham, in trust for $                                                                                   

3.3       The check or draft shall be deposited in an interest bearing trust account (Tax ID xx-xxx-xxxx). No disbursement shall be made until the final release documents are signed and any required court approval has been obtained. 

4.         TIME OF PAYMENT 

4.1       The check or draft payable upon deposit shall be delivered to plaintiff’s attorneys within ______days from the date of this agreement. It is understood this payment shall be made with the understanding there will be additional   release documents including orders of dismissal at a later time.  twelve percent per annum interest shall apply from the date of the money should have been available from the date of the agreed delivery of the check or draft.

4.2       Defendant agrees to deliver to plaintiff’s attorneys all release or other settlement documents within ________ days of the date of this agreement.

5.         TERMS OF SETTLEMENT 

5.1       Neither the Plaintiff(s) nor their attorneys agree to any kind of  secrecy or confidentiality regarding any aspect of this case or settlement.

5.2       Plaintiff clients or the Guardian or Personal Representative will sign release documents and an agreement to hold defendant(s), their insurance company and attorneys harmless from payment of subrogation or liens in connection with this case, but reserving to them the right to negotiate settlement for less then the amounts claimed.  No one will be released except the defendant(s) who are a party to this agreement and their named agents or employees. The release documents shall only apply to the parties signing this agreement Any additional claims of plaintiff are hereby reserved to all other persons or entities.

5.3       The language of the release documents shall conform to the terms of this settlement agreement which contain all of the agreed terms of settlement. No other provisions shall be added to the final release documents that are not specifically set out in this memorandum.  This is a mutual release of all parties to this agreement.  Defendant also agrees to release any and all claims defendant has against plaintiff arising from this incident.

5.4     If minor child or other court approval is required, plaintiffs agree to be fully responsible for the approvals required. It is agreed that if such approval is required plaintiffs attorneys will retain the settlement monies in their trust account until such approval is approved.

5.4  Other provisions:________________________________________

Dated this ___day of ____20____

Plaintiffs                                                                                              Defendants

______________________  ______________________________

PARALEGAL CHECKLIST FOR SETTLEMENT DEMAND PROCEDURE

I think   plaintiff lawyers should  have written check  lists for almost every step or  procedure they follow in processing cases to avoid mistakes. Here is an example of a check list for a paralegal to follow in preparing the attorney for settlement  negotiation and attorney demand procedure. The paralegal can do a lot to assist  the lawyer in starting  the settlement negotiation process. .

                                   SETTLEMENT CHECKLIST FOR PARALEGAL 

SETTLEMENT DEMAND LETTERS

If we are sending a settlement demand letter to an insurance company or defense attorney make sure the following is done..

  1. Client OK No demand letter can be sent until written client authority is obtained and filed by attorney
  2. Information needed The secretary should provide attorney the following information before seeking getting client authority for a demand.
  3. Costs to date & information about any unbilled costs. This includes any referring or associate attorney out of pocket costs as well as our own.
  4. The totals due for subrogation, liens, or amounts due as reimbursement.
  5. We will need the current totals of economic loss information such as: wage loss, Bills both past and future and property damage. 

Use  RED STAMP TITLED “CONFIDENTIAL SETTLEMENT MATERIALS” on first page of the demand letter the attorney drafts.

NOTICE Ask attorney if any of the following should get a copy of this demand: subrogation claimants, Medicaid, medicare, Labor & Industries, Welfare, Labor and Industries, Medical or other Insurance company

  • Written client  authority for demand and minimum settlement amount authorized must be obtained before the  letter may be mailed.  

Client copy Always send a copy of settlement demand letter with attachments to the client. Put one copy without attachments in correspondence.

INSTRUCTIONS FOR PREPARATION OF SETTLEMENT FILE

Open a green letter size file folder labeled “settlement” with client’s name. IT MUST CONTAIN THE FOLLOWING MATERIALS:

Settlement documents from client file: 

Letters Copy of all letters between our office and insurance adjustor or defense attorney relating to settlement. The latest should be on top and arranged chronologically. Put under case summary sheet on right side of file.

Phone calls Include under “Phone” tab on left side of file any phone message or memo dealing with settlement.

E-Mails: Copies of all  E-mails  dealing  with settlement

Fee agreement Include under “Fees” a copy of our fee agreement and any associate attorney fee division letter, agreement or memo.

Notice letters Include with correspondence letters giving notice to others of the mediation. 

Forms: Insert in File 

Settlement Summary memorandum   for signature  of all  parties  if  settlement is reached.  Settlements not binding unless a) in writing or b) made of record. See Howard v Dimaggio 70 Wa App 734 (1933) See CR 2A & RCW 2.44.010. Put loose in file copies of form “Settlement Summary.” Also, punch and put one under tab. Have copies for mediator, defense lawyer and client.

Settlement History Form Put the form “Negotiation History” on top left side of file.

Have diary reminder to see that a completed copy is in the green file if settlement is reached.

Cost advanced  Include under tab “Costs” on left side of file a current up to date copy of our costs advanced. Do same with associate attorney’s costs.

Form: Negotiation History Put on top left side the form regarding the negotiation history for the file.

Client OK & Attorney Evaluation Include under tab “Client OK” any letter, form, memo or phone message regarding the client’s authority to us to settle case. If none, ask attorney about it and put memo as to what’s said under this tab.

Check Lists Include on left side under negotiation history this check list. MAKE SURE EVERY APPLICABLE ITEM HAS BEEN REVIEWED, COMPLETED AND CHECKED OFF

Put copy of attorney settlement check list under above check list.

Put your name on the top right side of the settlement checklist in the green file after you have filled it out to show you have gone through the check list.

Summary Sheet Check case summary sheet. Make certain it is accurate and current. Put on left side of file over correspondence.

FILL IN ACCURATELY AMOUNT OF AVAILABLE INSURANCE

FILL IN ACCURATELY TRIAL DATE.

Insurance Include under tab “Ins” on left side of file any interrogatories which give insurance coverage. Copy any memos, letters etc which might effect insurance coverage. Put under same tab.

Subrogation You must verify subrogation amounts for settlement negotiation conferences or mediation.. 

NOTICE 

It is very important that we give notice to the proper people of any settlement conference or  mediation of any kind. We normally would send such people a copy of whatever we submit and invite them to attend or be available during the settlement proceedings. Ask the attorney about the following:

Normally our client must attend the mediation. Ask attorney. If client attendance required:Send client form letter about mediation and the need to bring reading material.

Ask attorney if a client conference with attorney in advance of conference is needed. Find out if that should be before the day of hearing or day of hearing and arrange with client.

Ask attorney if meeting on day of mediation with client should be arranged. If so, allow normally 30 minutes for this conference. Normally this will be in the same place as where the mediation is going to take place. Make sure the letter spells this out where the meeting will take place.

Out of town clients. If the Client is traveling some distance ask the lawyer about putting the client up at a hotel the night before

Associate Attorney. Make sure associate counsel is aware of the conference.

Labor & Industries: RCW 51.24.030 requires notice to the Dept of L & I of any complaint filed as well as pleadings etc. They MUST be given notice of any settlement proceedings. Check with the attorney as to what documents should be provided to them.

DSHS RCW 43.20b.070 requires notice to the DSHS of the filing of any complaint as well as other information. Under RCW 74.09.180 and 43.20B.060 DSHS is given a lien against any settlement. Check with the attorney as to whether notice should be given to DSHS of mediation and what documents should be provided.

SUBROGATION CLAIMANTS  Subrogation claimants must be notified. Check with the attorney about this as it is very important. Ask who to notify and what to say.

Our Office The people in our law office responsible for subrogation must be notified as soon as the mediation or settlement meeting is scheduled.

 STEPS REGARDING SUBROGATION. Check on the following. This information should be in the green file under a tab “Subro” on the left side:

__1.     Labor & Industries: Verify amounts due in repayment.

__2.     DSHS Verify amounts due in repayment.

__3.     Medicare. 42 USC 1395 gives them rights of reimbursement. They must be considered before any settlement is made. Ask if verification is necessary.

__4.     ERISA. Private insurance claiming privileges under ERISA must be considered before any settlement can be reached. Ask if verification is necessary. 

__5.     MEDICAL INS. Subrogation claimed by medical insurance carriers must be considered. Verify amount due.

__6.     Other: Review file and discuss with attorney any other subrogation or liens that must be verified before the mediation. 

__7.     Make sure the list of subrogation claimants and amounts are provided

__2.     Normally a settlement demand letter should be mailed before this conference takes place. Make sure this is included in a green settlement folder for attorney.

AFTER SETTLEMENT

ATTORNEY TO DO: 

__1.     Write client. Advise client about following:

__a.     Explain terms of settlement

__b.     Should client consider new wills?

__c.     Should client consider increasing their liability insurance on car, house, boat etc? Buy an excess policy?

__d.     Suggest client get financial advice. Give names.

B.         SECRETARY PROJECTS

__1.     Prepare diary reminders about each of above attorney asks client to take care of to see if done or not 

___2.     Notify: Notify the following people that the case has been settled. Secretary to do Tickler to see this is done.

__3.     Collect bills & subro Jeanne to write experts, creditors and subrogation people. Contact associate attorney re costs. Secretary to do tickler to see this is done.

__4.     Settlement Breakdown: Jeanne to prepare settlement breakdown for attorney approval and client approval. Secretary to do tickler to see this done.

__5.     Collect the money. Every settlement should have deadline for receipt of the money. Ask the attorney. Secretary to prepare a tickler to the attorney to see if collected. Jeanne to do tickler get settlement check.

__6.     When money here. When money received advise attorney

__7.     Form Disbursement letter Be sure to use standard letter enclosing check advising client unable to give tax information, advising the amount of any interest earned, indicating anything significant re subrogation or money held back.

__8.     Delivering client money. Attorney to present final settlement check to client if clients comes in.

__9.     Minor Child Proceeds 

__(1) If minor involved must follow approval procedure 

a.         Appointment GAL

b.         Guardianship?

c.         Petition for approval/fees/division

__8.     Liens:  If liens involved must have approval to settle

HOW TO WRITE A SETTLEMENT DEMAND LETTER

There are a lot of ways you can write a settlement demand letter and some demands are by DVD instead of just a letter. One format I’ve followed for a demand letter in a typical personal injury case is to outline what I think the carrier wants to know. I supplement this letter with documentation. The more paper you send the more likely to settle, at least in the less major cases. I usually enclose a copy of the letter with a statement that the copy is provided so they can send this to their client. I want to pressure the ethical obligation of advising clients of settlement offers as in some cases defense counsel just don’t do it.

Here’s my basic outline:

1.  Introduction to letter

There is an introductory paragraph indicating the purpose of the letter and outlining any conditions of settlement such as not agreeing to confidentiality.

2.  Facts of Negligence

Here I insert an outline of the facts. I reference attached police reports, photos, statements and other documentation I am providing. I cite applicable law and outline our claims of negligence. I discuss contributory negligence as well.

3.  Client Background

I provide a history of the clients that is relevant. That would include vital statistics, marital, occupation and the like. I list children and ages and otherwise paint a family history plus the specifics regarding the client.

4.  The Injuries

Here I describe the pre health condition of the client and the injuries received with the impact on the precondition. I attach documentation of medical informaton including hospital information, doctor etc. I usually attach a photo of the client and family.

5.  The Bills

Here I list  the economic loss. The past bills, wage loss and the future as well. I provide documentation of the bills plus economist report and ot her documents to support the economic claim.

6.  Evaluation

In this section I make an evaluation of the case considering the liability, the injuries, the bills and the non-economic loss. I outline the applicable law that applies to the damage case. I make a specific demand for a dollar settlement.

7.  Conclusion

In the final paragraph I advise how long the offer will remain open and discuss any other aspect of the case that should be clarified.