High-Low Agreements in Personal Injury Cases

Generally, I dislike trying personal injury cases with high-low agreements that contain the size of the verdict. If you are going to force us to take the case to trial, I would prefer to have the chance of the upside. My gut level reaction is no deal.

But the problem with this bravado is clients. Our law firm has a decent volume of personal injury cases which means our lawyers are able to spread the risk of the possibility of a bad outcome at trial. Clients have just one case, so their risk calculus is very different. An added force of inertia for high-low agreements that tends to make the numbers more reasonable for injury victims is that insurance companies do want to limit the possibility of a verdict in excess of policy limits.

If you are going to make a high-low agreement, it is important to make sure everyone is crystal clear on what the agreement is. Not most, but a good number of high-lows are made during trial while the jury is out. Yesterday, in Missouri Lawyers Weekly, there was an article about a case in which the parties reached a high-low settlement in what I think was a car accident case (the article is not clear) just before the jury reached a verdict. According to the plaintiff’s lawyer, the settlement agreement was for whatever the jury handed down up to $1.36 million, plus prejudgment interest. Incredibly, the jury awarded exactly that: $1 million plus $360,000 in prejudgment interest.

The defense attorneys filed a motion to set aside the judgment and enforce the settlement agreement, arguing that the agreement did not include prejudgment interest. The trial judge agreed and ordered the settlement of $1 million be enforced with no prejudgment interest. The plaintiff is appealing that decision.

How this gets sorted out is anyone’s guess. It sounds like a lot of he said/she said stuff that you really want to avoid litigating. The take home message here is obvious: all high-low agreements need to be crystal clear on every essential ingredient, including costs, and in cases where applicable, interest and attorneys’ fees.

  • That is an unfortunate result, however, one that on its face will probable be ruled in favor of the Defendants. Hi-Low “Agreements” are just that, Agreements that should be treated the same as any other contract. I find that many personal injury lawyers while skilled on the rules of evidence, trial advocacy and the nuances of tort law, forget the basics when it comes to contract drafting and negotiation. Many times, all that one receives or sends is a confirming letter to opposing counsel that we agreed on a hi-low and this is the range. Nothing is specified beyond the range. This is unfortunate because fortune does not reward the sleeping dog. At least that is what a fortune cookie once told me.

  • I agree with Mr Riveros. These types of agreements must be well drafted and chrystal clear. There should be no chance of ambiguity.

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