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Do Plaintiffs Sign Releases Before Receiving a Settlement Check in New York

Plaintiffs generally sign releases before receiving a settlement check in New York. This release will absolve the defendant from further liability and prevent the plaintiff from filing or pursuing additional claims against the defendant.

Legal Settlements

A legal settlement is a formal agreement between the plaintiff and defendant to resolve a dispute, typically involving the defendant or their insurance company paying the plaintiff money in exchange for the plaintiff agreeing to release the defendant from further liability. Settlements can be reached before a lawsuit is filed or any time before a verdict. Approximately 95% of personal injury cases end in a settlement, with only about 5% of cases going to trial. Settlements are more common due to the cost and uncertainty of trials, and many cases settle just before trial or even during a trial.

Settlements can occur at various points during litigation, such as after the plaintiff files the initial complaint but before the defendant responds, during the discovery phase while both sides gather evidence and conduct depositions, after pretrial motions like motions for summary judgment, right before jury selection begins for the trial, or even after the trial starts, including after the plaintiff rests their case.

The settlement negotiation process between insurance companies and plaintiff's lawyers typically begins with a demand letter from the plaintiff's attorney. The insurance company responds with an initial settlement offer, and the attorneys negotiate back and forth to arrive at an acceptable settlement amount. Mediators or arbitrators may be brought in to facilitate negotiations, but ultimately, the plaintiff has the final say on accepting or rejecting a settlement offer.

By agreeing to a settlement, the plaintiff gives up the right to pursue further compensation, as settlements are final and binding once accepted. The plaintiff waives their right to pursue the claim further, even if new evidence emerges, and cannot reopen the claim or file a new lawsuit for the same incident. Settlements may include indemnity clauses to protect the defendant from related claims, and structured settlements may allow plaintiffs to receive periodic payments rather than a lump sum.

Requirements for a Settlement in New York

In New York, several requirements must be met for a settlement to be valid. For instance, a New York settlement agreement must be in writing to be enforceable. Before receiving a settlement check, plaintiffs must sign release forms that discharge the defendant and insurance company from any further responsibility related to the incident. The release applies to all parties named in the agreement and extends to the defendant's employees, agents, and affiliates. Plaintiffs cannot bring future claims against the defendant for the same matter, and they waive the right to pursue additional claims arising from the incident, including those for injuries, damages, and losses known at the time of settlement. The release may also include language covering unknown or future claims related to the incident, preventing plaintiffs from filing separate lawsuits for different types of damages. By signing the release, plaintiffs agree to accept the settlement amount as full and final payment and cannot seek further compensation from the defendant or their insurance company, even if their injuries worsen or new damages are discovered. Plaintiffs bear the risk of settling for less than the full value of their claim. It is important to note that a settlement does not constitute an admission of guilt or wrongdoing by the defendant, who maintains their innocence or denies liability. The settlement may be characterized as a business decision to avoid trial costs, and plaintiffs cannot claim the settlement is proof of the defendant's fault.

In addition to signing release forms, plaintiffs may also be required to sign confidentiality agreements that prohibit them from disclosing the terms of the settlement, keeping the amount and other details private. These agreements restrict plaintiffs from discussing the case publicly and specify consequences for breaching confidentiality, such as returning the settlement funds.

The plaintiff's personal injury lawyer is responsible for submitting documentation to the court, including filing a stipulation of discontinuance to dismiss the lawsuit and providing proof of settlement. In cases involving minors or incapacitated persons, the court's approval is required for settlements over a certain amount, and a guardian ad litem may be appointed to represent the minor's interests. The settlement funds may be structured to provide for the minor's future needs, and a portion of the settlement may be required to be deposited into a restricted account until the minor reaches adulthood. The personal injury lawyer must ensure compliance with any court-ordered settlement allocations or restrictions.The statement provided generally outlines the key aspects of settlement agreements in New York, but it does not address specific legal formalities and requirements directly related to the enforceability of settlements.

Importance of Having a Personal Injury Attorney Advise During Settlement Process

Having a personal injury attorney advise during the settlement process is crucial for evaluating the strength of the case. This involves analyzing liability based on the facts and evidence, such as reviewing police reports, accident scene photos, and witness statements, determining the extent of the defendant's fault or negligence, identifying any shared fault or comparative negligence by the plaintiff, and assessing the likelihood of proving liability at trial. The attorney will also assess the value of damages by calculating economic damages, such as medical bills and lost wages, estimating future medical expenses and lost earning capacity, evaluating non-economic damages, such as pain and suffering and emotional distress, and comparing the case to similar cases and jury verdicts in the jurisdiction. Additionally, the attorney will consider the defendant's insurance coverage and assets by determining the policy limits of the defendant's insurance, investigating whether the defendant has additional assets or umbrella coverage, evaluating the likelihood of collecting a judgment beyond the insurance limits, and advising the plaintiff on the realistic recovery potential.

Drafting and reviewing settlement documents is another critical task for the personal injury attorney. The attorney will ensure that the release is fair and comprehensive by reviewing the language of the release to protect the plaintiff's rights, negotiating any overly broad or restrictive terms in the release, ensuring the release covers all relevant parties and claims, and advising the plaintiff on the implications of signing the release. The attorney will also explain the terms of the settlement agreement, including reviewing the payment terms, such as the amount, timing, and method of payment, explaining any non-monetary terms, such as confidentiality or non-disparagement clauses, discussing any tax implications or reporting requirements, and ensuring the plaintiff understands their obligations under the agreement. Finally, the attorney will finalize the settlement paperwork by making any necessary revisions or amendments to the settlement documents, obtaining signatures from all parties on the final agreement, distributing copies of the fully executed agreement to all parties, and maintaining a complete record of the settlement documentation.

In summary, plaintiffs in New York typically sign releases before receiving settlement checks to absolve defendants from further liability and prevent additional claims. Settlements are common in personal injury cases, often occurring at various stages of litigation, and require plaintiffs to waive their rights to pursue further compensation. For a settlement to be valid in New York, it must be in writing, and plaintiffs must sign release forms discharging the defendant and insurance company from further responsibility. Confidentiality agreements may also be required. Having a personal injury attorney like us advise during the settlement process is crucial for evaluating the case, assessing damages, considering the defendant's insurance coverage and assets, drafting and reviewing settlement documents, explaining the terms of the agreement, and finalizing the settlement paperwork. Should you need legal representation, we at the Law Offices of Albert Goodwin are here for you. We represent personal injury victims throughout the state of New York, including all five boroughs of New York City (Manhattan, Brooklyn, Queens, The Bronx, and Staten Island), Long Island, and Upstate New York. You can call us at 212-233-1233 or send us an email at [email protected]. We are located in Midtown, Manhattan.

Attorney Albert Goodwin

About the Author

Albert Goodwin Esq. is a licenced New York attorney with over 17 years of courtroom experience. His extensive knowledge and expertise make him well-qualified to write authoritative articles on a wide range of legal topics. He can be reached at 212-233-1233 or [email protected].

Albert Goodwin gave interviews to and appeared on the following media outlets:

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