Do we Have a Deal? The Most Common Mistake Lawyers Make During Settlement Negotiations

As a trial attorney, I have negotiated countless settlements. The negotiations typically center around cash - how much money the defendant is going to pay the plaintiff. The most common mistake lawyers make during settlement discussions: they neglect to discuss whether their client's settlement offer or demand is contingent upon the execution of a release and settlement agreement or - much more frequently - they fail to address the specific terms they expect to include in the settlement agreement. Indeed, while cash is perhaps king, the other terms of a release and settlement agreement can be pivotal components of the settlement equation. In some instances, those other terms can be equally or more important than the monetary component of a settlement.

I have seen lawyers accompany demands or offers with a statement such as "we'll also expect the execution of a standard release and settlement agreement," or words to that effect. Other lawyers simply assume their client's demand or offer is contingent upon the execution of a standard release and settlement agreement, but fail to raise the issue until the parties have reached an agreement regarding the monetary aspect of their dispute.

Lawyers no not share a unanimous understanding regarding the terms of a "standard" release and settlement agreement. In addition, while most attorneys typically assume a settlement will be accompanied by a formal release and settlement agreement, some attorneys take the opposite approach. To avoid any issues, lawyers should discuss the concept of a written release and settlement agreement at the onset of settlement discussions, and should begin to negotiate the terms of the agreement sooner than later, such as when it appears the parties are not "worlds apart" in terms of their expectations. There may be key non-monetary provisions one party desires to include in the settlement agreement which may be wholly unacceptable to the other party. Knowing in advance whether those provisions are acceptable to the other party, or at least negotiable, can avoid any misunderstandings. In addition, it can allow a party to raise or lower their monetary expectations based upon the other terms of the settlement agreement. Don't focus exclusively on the money; as with many things legal, the devil is in the details.

For more information regarding trial and litigation, contact the Goosmann Law Firm at info@goosmannlaw.com or call 712-226-4000.