What is a Car Accident Settlement Agreement?
A Car Accident Settlement Agreement is a legally binding document that comes into effect when various types of litigation have been resolved. After the injuries are treated, and medical bills and lost wages have been paid by insurance companies, the insurance industry will favor an out-of-court settlement. Afterall, an in-court jury decision is just as unpredictable as any other possible verdict.
Although those agreeing to such settlement are reluctant to disclose the actual terms of the agreement to outside parties, so we are only talking generalities here.
A Settlement Agreement is a legally binding contract that should be carefully drafted and signed by all parties involved . It basically creates a settlement between the injured person and the negligent party, wherein the injured party releases the negligent party from all claims or lawsuits related to the incident or injury.
The purpose of the Settlement Agreement is to finalize the case and obtain a maximum value in exchange for the release of claims. The Agreement will include all relevant objections and waivers of right including: release of negligence, compromise and accord, mutual waiver of further claims and assumption of liability by the plaintiff.
In most cases, the last payment issued by the insurance company to the injured party at the time of final settlement will be made to the plaintiff’s attorney who will withhold his or her legal fee, reimbursements for costs of the action, repayment of medical expenses, and issues a final check to the injured party.
Elements of the Agreement Form
Car accident settlement agreement forms contain several key components that help ensure clarity and mutual understanding between the parties involved. Among these are identifying the parties to the agreement by discussing their relationship to the property damage and/or personal injury claims for which the settlement is being made, and stipulating the settlement amount.
Parties: The parties to the agreement are typically the defendant (the person or party who is agreeing to pay money to satisfy the settlement) and the plaintiff (the injury victim or damaged party who is agreeing to accept the settlement and sign the release). If the defendant has been named as a defendant in a lawsuit, the defendant will be identified as a Further Insured under the terms of one or more of the auto insurance policies they have purchased. The settlement will name all of their auto insurance policies with the settlement amount stated along with the policy numbers.
Agreement to Compromise and Release: This section of a car accident settlement agreement form typically includes a release of liability, or waiver of such liability which means that the injury victim understands the sense of their agreement not to pursue any further payments from the liable party or parties once the payment specified in the agreement is made. From the perspective of the liable party, this is secured by the injury victim signing the "Release of Liability" or "Waiver" section in the agreement which specifies that the injury victim is forever releasing the liable party or parties from liability.
Process for Completing a Settlement Agreement
In almost all cases, the settlement agreement will have a form. That form will make clear that the plaintiff is releasing the defendant(s) and the insurance company from any further liability. In most cases, the only way that the plaintiff will go forward with the case, is if he or she signs the release form. In the United States, a release of liability involves an agreement between the parties to terminate any type of liability or claims which are present or may arise. In exchange for a release, the plaintiff’s claim or lawsuit is dismissed in court. The settlement agreement should include the date of the agreement, the place the agreement was signed, a statement of acceptance by each of the parties, the full names of the parties, a statement of facts, consideration for the agreement, an agreement to be forever barred from bringing claims and/or lawsuits arising from the matter, a confidentiality provision, if applicable, a governing law provision, a mutual dismissal of the lawsuit, and an agreement to cooperate in future proceedings. In general, beginning in the second half of the first century A.D., one of England’s Kings, Henry II, made it possible for citizens to petition the court to settle disputes and find remedies for their wrongs. After that, English courts carried out civil jurisdiction until the 1850’s, when civil suits were introduced as a means of compensation for citizens wronged by others. Early American courts were modeled after English courts, and both developed a uniform set of rules and procedures for settling claims and lawsuits. Today’s basic steps for completing a settlement agreement include: – The plaintiff must sign and date the settlement agreement, and place his or her signature in front of a notary public (if it will be filed in court). – The defendant must sign and date the settlement agreement, file it in court (if applicable), and send a copy to the plaintiff. – After the agreement is in writing, the plaintiff must then sign the document in front of a Notary Public and then submit a copy to the court. This shows that both parties agree on the contents of the settlement agreement.
Legal Implications of Signing
The finality of signing a car accident settlement agreement is very important to understand. Essentially, once you have signed this type of agreement, your rights to any future claims against the person who is responsible for the crash will be gone, forever.
There are generally two ways that an agreement is signed after a car accident case settles, each having their own legal implications.
On some occasions, you might have the actual piece of paper used to sign the agreement. We call it a release and it might be a form or another form of writing signed by both sides. It is the most binding form of agreement and essentially ends the case right then and there.
More commonly, though, there will be what is called a "letter to be signed" sent from the at-fault insurance company as a draft of their release agreement. That means that the insurance company has proposed a form of agreement for both of the sides to sign. Whether you and your lawyer choose the one offered or you have your own version prepared, you will sign and then send it back to the insurance company with none of the lines in the document signed by anyone. Then you will be sent money.
For example, the letter will request that for sending the money, that you agree to not sue them in any way regarding this accident . You will also agree to have no further claims against their insured (the person who crashed into you). You are also agreeing to not sue any of the other people that are named in the letter.
You get back all of the signed agreements signed by the at-fault insurance company, the at-fault driver, and his insurance agent or attorney. You are then agreeing to all of the same things. That means you are closing out any further claim of negligence against them. Once you accept the check, you are agreeing to all of this.
But signing this release also ends any and all future claims you might want to file against the insured and their insurance company. So, for example, if you likely forget to fill in a line in the form that might have prevented you from claiming future injuries from the crash, it does not matter because you signed the agreement and closed out both the accident and any claims of negligence including any future claims. In fact, if you ask the insurance company to cover a claim that might have been covered by a line you forgot to fill in, they might even be able to successfully argue in a court of law that you can’t make that claim simply because you signed the form. And it is even more difficult to argue in a court of law that you overlooked something in the accident than it is to nail down a valid point of policy.
When You Need a Lawyer
There are certain situations where a lawyer can provide real value before signing an automobile accident settlement agreement.
There are times that any person involved in an auto accident should consult a lawyer before signing an insurance company’s "settlement agreement form" or other type of document prepared by the insurance company. If your accident involved any of the following factors, you would be wise to consult a lawyer before signing the agreement: Despite these circumstances, most people are quite willing to sign the settlement documents and trust the insurance company’s lawyers and doctors whenever they tell me they have done so. A common scenario after a car accident is the insurance company’s doctor has advised them that they may go back to work "immediately" or "within a few days". Trusting the insurance company, they sign the "settlement agreement" under that impression and then fall short of their trust when weeks later they are unable to return to their jobs. The insurance company, claiming it relied upon the reports of its doctor, will refuse to provide medical treatment and wage loss benefits! A qualified lawyer would have refused to settle without obtaining a written and signed opinion from the doctor that the work restrictions were only "temporary" and a prognosis indicating once stabilized the work restrictions were expected to continue indefinitely. That was a costly mistake that could have been easily and inexpensively avoided if the person had consulted an attorney who knew what questions to ask. Another common scenario is again after believing they are back to normal, but found to the shock of their dismay they must undergo surgery or further treatment. The insurance company is usually quick to refuse the request for authorization to treat, claiming the prior settlement agreement releases the insurance company from further responsibility for medical treatment and lost wages or any permanent impairment. A good lawyer would have demanded an exception clause be added to the settlement terms, whereby a certain sum of money could be retained to cover this eventuality. This is not a costly or complicated step in a settlement. In my many years of settlement experience, I have never been turned down by an opposing lawyer when I requested such an exception clause. The sad thing about this, is an injured person who does not engage a lawyer, usually considers both of these scenarios as "my fault" for signing the agreement too early. Unfortunately, it was the insurance company doctor and lawyer that advised they were ready to go back to work. And when it turns out it wasn’t so, they see no remedy.
Common Questions and Misunderstandings
What happens if I ignore the request to sign an accident settlement agreement?
If you ignore the request to sign an agreement, you will not be able to guarantee a favourable resolution of your case. Further, if your accident agreement does not include these terms, the other party can raise a question as to why it does not, and refuse to proceed with the settlement.
Once I’ve signed the car accident settlement agreement form, am I locked in?
Not always. You must closely look at the agreement embedded in your case. You will almost always have to sign the agreement so that the case can be closed. However, most agreements have a liberal time frame as to when you can go back to court.
What if I realize I don’t want to sign the agreement?
Do seek legal counsel. If you have counsel, you can discuss your concerns and ask what alternatives are possible.
If I sign the agreement, does that mean I waive my right to go to court?
You have the option to go to court. However , the indemnification process will be halted.
Can I sue just because I didn’t sign the agreement?
You can still sue but obtaining a favourable verdict is sometimes difficult. The defendant may raise the defence that you signed an accident settlement agreement and therefore are barred from seeking a different form of redress.
If I sign the post-accident settlement agreement, can I still undergo treatment?
Of course. Just because you’ve signed the accident settlement form does not bar you from seeking medical attention and undergoing treatment. In fact, it is suggested that you seek medical treatment so that you can recover both physically and financially.
What if the party responsible for the injury is going through financial troubles and doesn’t go through with the settlement agreement?
One party can honor the terms of the agreement whilst the other party can default or abandon it. Further, it is usually required that you collect your award within a specific time period. If you cannot do so, then you can go to court and revive your case.