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Make preparation for a settlement from the start of the case. You should generally do all of the following:
Review the ethical obligations for settlement negotiations that are detailed in:
Each stage of litigation will give rise to different motivating factors to settle:
Standard terms should not be included in the agreement without being scrutinized. Care should be taken with terms such as:
Name the proper parties to the settlement in the agreement and identify all parties with specificity. Parties may include:
Recitals appear at the start of the agreement and provide background of the settlement and underlying dispute, such as:
Nearly all settlement agreements include a paragraph in which the parties represent that they agree to resolve the dispute without the defendant admitting liability in the underlying civil case. These statements generally include language stating the settlement:
Make sure the settlement:
Settlement agreements generally contain a release to at minimum avoid a future dispute over the same claims at issue in the current dispute. When drafting the release, you should:
Unless the settlement agreement contains a valid choice-of-law provision, the effect of a release of state-law claims is governed by the law of the forum state, while federal common law governs the effect of a release of federal claims.1
One benefit to settling out of court is that the details are not part of the public record. Many settlement agreements incorporate a confidentiality clause that strictly prohibits the parties from disclosing certain details of the case. When considering your need for confidentiality in the agreement:
If the agreement contemplates non-monetary obligations, you should address the steps the parties must take in the event of a breach:
Checklist provided by James M. Wagstaffe, a renowned author, litigator, educator, and lecturer, and the premier industry authority on pretrial federal civil procedure. He is a partner and co-founder of Kerr & Wagstaffe LLP, where he heads the firm’s Federal Practice Group. See his full bio here: https://www.lexisnexis.com/en-us/practice-advisor-authors/profiles/james-wagstaffe.page.
To find this article in Lexis Practice Advisor, follow this research path:
RESEARCH PATH: Civil Litigation > Settlement > Checklists
For guidance on reviewing a settlement agreement, see
> SETTLEMENT: REVIEWING A SETTLEMENT AGREEMENT CHECKLIST (FEDERAL)
For sample settlement agreements in employment actions, see
> SETTLEMENT AGREEMENT (EMPLOYMENT DISCRIMINATION CLASS ACTION) AND SETTLEMENT AGREEMENT (FRCP RULE 23 WAGE AND HOUR CLASS ACTION)
RESEARCH PATH: Labor & Employment > Employment Litigation > Class and Collective Actions > Forms
For assistance in drafting a settlement agreement in patent litigation, see
> PATENT SETTLEMENT AGREEMENT AND RELEASE (PRO-PATENT OWNER)
RESEARCH PATH: Intellectual Property & Technology > Patents > Patent Litigation > Forms
For general settlement forms, see
> SETTLEMENT AGREEMENT AND RELEASE (FEDERAL) AND STIPULATION OF DISMISSAL AND PROPOSED ORDER (FEDERAL)
RESEARCH PATH: Civil Litigation > Settlement > Forms
For a list of steps to take when establishing a document retention policy, see
> DOCUMENT RETENTION POLICY CHECKLIST (FEDERAL)
RESEARCH PATH: Civil Litigation > Pre-litigation > Checklists
For an overview of settlement enforcement, see
> SETTLEMENT: ENFORCING SETTLEMENTS AND CONSENT DECREES (FEDERAL)
RESEARCH PATH: Civil Litigation > Settlement > Practice Notes
1. See Renwick v. Bennett (In re Bennett), 298 F.3d 1059, 1064 (9th Cir. 2002).