Sometimes parties cannot reach a settlement agreement, yet for one reason or another both parties are concerned about what a jury is ultimately going to decide in the case. The plaintiff may be concerned that the jury will not believe his injuries were caused by the accident and be worried that he or she will not get very much money from the jury. The defendant may at the same time be concerned that the jury will believe the plaintiff and also perhaps think that the defendant’s negligence was particularly bad and give a really large amount of money to the plaintiff. In this situation, where the parties are especially nervous about the potential outcome, sometimes they might make what is called a high/low agreement.
In a high/low agreement, the parties agree that they will go to trial and let the jury decide the case but regardless of the amount given by the jury the defendants will pay a minimum amount of money and also have a limit to the amount of money they have to pay to the plaintiff.
For example: The parties reach a high/low agreement of $200,000 high and $50,000 low. No matter what amount the jury comes back with, the plaintiff will get at most $200,000 and at least $50,000. So if the jury gives $1 million, the plaintiff only gets $200,000. If the jury gives nothing, the plaintiff will still get $50,000.
If the jury gives $100,000 (or any amount between the high and low amounts in the agreement), the plaintiff gets the amount of the verdict. By using a high/low agreement, the parties can have a little less stress about going to trial because the plaintiff knows that he or she will at least get something no matter what the jury does and the defendant knows that if the jury gives a really huge amount, that the maximum amount that will actually have to be paid is limited to the high amount in the agreement.
Some mediation styles and procedures differ by state, mediator and sometimes even by court, so check with your personal injury attorney to make sure you understand the exact nature of how the mediation will be conducted. Also, make sure you take some copies of the settlement calculation sheet in the appendices at the back of this book, so that when offers are made by the defendant you will be able to more easily calculate just how much of the settlement you will get after all fees, expenses and bills are paid. (See checklist on preparing for your mediation in the Appendices.)
First I will explain what offers of personal injury judgment are and then I will tell you why some injury lawyers think the concept can be very unfair to plaintiffs in some jurisdictions.
In the federal court system and also under many state court rules a party may, within a certain number of days prior to trial (10 days in the federal system) serve a written offer to the plaintiff to settle the case for a certain amount of money (it is technically a personal injury judgment, not a settlement, but for simplicity, we will call it a settlement). The plaintiff then has a limited number of days to accept the offer or do nothing, in which case it is automatically rejected. If the plaintiff rejects the offer, then the offer is “locked in” and is no longer available for the plaintiff (unless the offeror voluntarily chooses to keep the offer “open”).
Here’s the important part: If the case goes to trial and the plaintiff does not get an amount from the jury greater than the offer of personal injury judgment, the plaintiff is required to pay the defendant’s costs accrued from the time the offer was made until the end of the trial. This can be a lot of money.
Here are the details of the federal process, as described by Rule 68 of the Federal Rules of Civil Procedure:
At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow personal injury judgment to be taken against the defending party for the money or property or to the effect specified in the offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the clerk shall enter personal injury judgment. An offer not accepted shall be deemed withdrawn and evidence thereof is not admissible except in a proceeding to determine costs. If the personal injury judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer. The fact that an offer is made but not accepted does not preclude a subsequent offer. When the liability of one party to another has been determined by verdict or order or personal injury judgment, but the amount or extent of the liability remains to be determined by further proceedings, the party adpersonal injury judged liable may make an offer of personal injury judgment, which shall have the same effect as an offer made before trial if it is served within a reasonable time not less than 10 days prior to the commencement of hearings to determine the amount or extent of liability.
To help this make more sense, consider this example. Plaintiff sues defendant for injuries from an car accident. They are unable to settle the claim and a lawsuit is filed. The parties continue to negotiate and, as required by the personal injury judge, attend a mediation which takes place two months before trial.
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