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Common Mistakes When Signing Settlement Agreements


If the defendant in your injury case decides to offer an amount that you are satisfied with accepting, your case will settle. That’s good news, but don’t be mistaken into thinking that the battle is over. You will be asked to sign a settlement agreement as a condition of receiving your funds. That settlement agreement can have a number of “poison pills” and pitfalls.

Before going further into detail about the things that insurance companies and defendants try to sneak into settlement agreements, it’s worth noting that if you have a good personal injury attorney, you don’t have to worry about these things. Your injury attorney will pick up on these, and inform you they are there, and even try to negotiate these things out of your settlement agreements.

But for those who choose to represent themselves, or who may choose attorneys who have less experience in personal injury law, these things can become big problems.

Releasing too many entities – Let’s say that you fall in the lobby of Bank of America. You sue, and they want you to release Bank of America for all claims, as a condition of getting your money. But if you do that, you are releasing them from everything-even possible claims unrelated to the accident. If you later find out that they made a mistake on your mortgage, or that they didn’t give you credit for a bank deposit, it’s too late—you have released them from all claims, of any kind. Make sure releases are limited to liability for the accident.

Releasing into the future – Many defendants will want you to release them for anything that may happen in the future. This is unreasonable and tantamount to a release that lasts forever; you have no way of knowing what could happen in the future. You don’t want to release someone for future events that have not happened yet.

Indemnification – Many defendants will say “if we get in trouble for settling with you, you will protect us.” That’s indemnification. Sometimes, you can agree to indemnification but you need to be careful, and be aware of what you are agreeing to. An indemnification clause makes you almost an insurer of the defendant, paying it to resolve any claims brought against the defendant as a result of the defendant’s settlement with you.

Confidentiality – Many settlement agreements will want you to keep the facts of the settlement secret. But many confidentiality agreements go way beyond that, restricting you from even saying anything bad about the defendant, related to the accident or otherwise. Whether you want to sign a confidentiality agreement is something for you to discuss with your attorney, but you also need to avoid signing a confidentiality agreement that is too all-encompassing or overbroad.

We can help you if you are injured, from the start of your case all the way to the very end. Call the West Palm Beach injury law attorneys at Pike & Lustig today.



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