What Is a Low Agreement
The Wingo court ruled that such an agreement was similar to a high-low agreement. It was not like a loan receipt agreement because it did not require applicants to repay money to the GP. Moreover, it was not like a Mary Carter agreement because there was no danger that the consenting defendant would ultimately pay nothing and there was no agreement until the arguments had been finalized, so the adversarial process was not distorted. However, the outcome of the Wingo case could have been different if the evidence had shown that the agreement had been reached prior to the defendant`s testimony, as the physician would have been financially involved in the outcome at that time. The problem with the Mary Carter agreements is that they give the defendant a financial interest in the outcome, which distorts the adversarial process if the settlement is kept secret from the jury. High/low agreements achieve the same goal as loan receipt agreements and Mary Carter agreements by reducing risk before receiving a verdict while eliminating public policy concerns that the courts have dismissed. Unlike loan contracts, the defendant remains a party to the dispute and is held liable by the jury. Thus, if the jury concludes that the defendant is not responsible for the damages caused by the plaintiff, entry does not become a problem. Unlike Mary Carter agreements, high/low settlements do not require reimbursement of the settlement if the non-comparative defendant is found liable. Essentially, because there is no refund of the settlement, the respondent is always incentivized to fully defend its case. Because of these differences, high/low agreements are regularly approved by the courts.
If a doctor`s liability is less certain and pre-trial settlement attempts have failed, if the case is sound to the defense, but the jury is likely to find the defendant unsympathetic to the plaintiff, if the damage is difficult to quantify, or if the plaintiff`s lawyer digs up information that is highly detrimental to the defendant, a high-low agreement will neutralize an out-of-control judgment. (2) On the second category of questions: This article provides an overview of the main conclusions of a recent study (and the corresponding article articulating the results of the study) by J.J. Prescott, Kathryn E. Spier and Albert Yoon (“Trial and Settlement: A Study of High-Low Agreements”) . In this study, the authors first articulate a theoretical model of high-low chords. Then, using data on claims from a national insurance company, they describe the characteristics of these agreements and empirically examine “the factors that may influence whether litigants discuss or enter into them.”  Their empirical results are consistent with the predictions of their theoretical model. The study looks at whether the agreements encourage more jury trials, what impact the agreements might have, who uses them, and why they are used. Among their various conclusions is the conclusion that top-down agreements actually significantly favor the resolution of cases in a court case rather than through a full settlement. Parties are more likely to go to court than if there were no high-level agreements. These and other results are explained in more detail below.
As defined in Black`s Law Dictionary, a high-low agreement is “[a] settlement in which a defendant agrees to pay the plaintiff a minimum refund in exchange for the plaintiff`s consent to accept a maximum amount, regardless of the outcome of the trial.” Black`s Law Dictionary 797 (9th edition 2009). Any result between the agreed limits must be accepted by the parties. Since a top-down agreement is a form of settlement agreement, it should be written down and explain what happens in each eventuality. Since these are contracts under Illinois` contractual principles, ambiguous terms are interpreted against the author of the disputed contractual provision. Contractual terms are ambiguous if they can reasonably be interpreted in more than one way due to lack of clarity or double meaning. Just because the parties disagree on a term does not mean that it is ambiguous. Illinois courts promote settlement agreements. A simple compromise agreement is preferable. However, if there are two or more defendants, the court will take a closer look at the settlement agreement to determine whether it was entered into in good faith, especially if an application for a contribution is pending.
If there are several plaintiffs and/or defendants, it is important to include in the upper-low terms to whom it applies and how to determine the judgment in case of joint and several liability. Section 8.01-35.1 of the Virginia Code deals with the effects of a release or obligation not to sue that “shall be held liable to one or more persons responsible for the same violation.” PAH Code § 8.01-35.1(A). The Code expressly states that these commitments include top-down agreements. According to the law, the high-low does not relieve the other injured parties, but any amount awarded to other aggrieved parties is reduced by the consideration granted to the agreement. Therefore, in a top-down agreement, the parties cannot include a limitation on the amount of compensation with other aggrieved parties, as this would deprive them of the rights provided for by law. Shortly before the trial, the plaintiff and Niagara entered into a high-low agreement with a maximum of $185,000 and a minimum participation of $155,000. .