Preparation is Critical to Successful Settlement Agreements
Successful settlement agreements convert the risks, delays, and expenses of lawsuits into mutual solutions that the parties select for themselves. Many settlement agreements are reached as the result of mediation, a legal process that helps parties transform misunderstanding into understanding and conflict into resolution. Settlement agreements do not instantly spring into being, however, fully formed and ready to be enforced. Furthermore, many issues can be addressed in an effective settlement agreement only with advance preparation. Unfortunately, many lawyers who would not dream of showing up unprepared for trial will arrive at a mediation without having done the necessary prep work and due diligence. The importance of preparation for success in resolving a legal dispute warrants the following tips from Eric Gordon on how to prepare to write an impactful settlement agreement. He also shares that this is not legal advice and it’s important to contact your lawyer for further questions.
Research potential terms of a settlement agreement. Understanding possible settlement options may itself foster agreement in allowing for creativity within the limits of the law. Start by identifying the terms that have the possibility of helping to resolve the specific case to be mediated. For example, insured claims resolved by settlement agreement tend to involve payment in exchange for a release of legal liability. In situations like this, a minimum of preparation requires consideration of whether payment will be made as a lump sum or in a series of payments. Furthermore, the entire scope of the release must be considered (whether it extends only to known claims or includes unknown claims, encompasses only claims made, or includes claims that could have been asserted).
Discuss potential solutions to the legal dispute with clients prior to the mediation. According to a recent study, a boilerplate settlement agreement does not exist. In other words, there is no one-size-fits-all solution that can be used to settle cases. Because of this, attorneys must engage their clients in conversations about possible solutions to their legal conflict as part of their work in preparing clients for mediation. Savvy business people and experienced mediation participants might have particular terms and proposals they expect to include in a final agreement. Institutional clients might provide settlement agreements they have used in the past to help with preparations.
Gather the required documents. Before the mediation session, collect all potentially applicable insurance policies, medical bills, liens, statements of fees and costs associated with the litigation, and any other relevant and pertinent document. For a breach of contract claim, gather not only the main contract but also any subcontracts and side agreements.
