Scott Seaman Considers High-Low Settlement Strategies and Best Practices
Hinshaw attorney Scott Seaman, a Chicago-based partner and co-chair of the firm's national Insurance Services Practice Group, considered high-low settlements in a Law360 article. In a high-low settlement, a defendant agrees to pay a minimum, regardless of the verdict, to the plaintiff, who agrees in turn to accept up to a maximum figure from the defense in the event of a favorable verdict — even if the jury comes back with a far bigger figure.
Seaman said that every high-low agreement should account for what happens in the event of a mistrial or a deadlocked jury. It should also include a covenant not to enforce a verdict outside the agreed-to range and a pay-by date. It should also address confidentiality of the deal itself and any potential impact on liens at play in the dispute.
“A high-low does add to the potential for an unhappy client and the best way to prepare for that is a full disclosure to the client in writing, a solidly drafted agreement, and being confident about enforceability,” Seaman is quoted as saying. “If all that is met, you’re protected against an unhappy client.”