Settlement of compensation claims

Most compensation claims end not in a judgment but in a document. After months of correspondence an insurer sends a settlement proposal, often a single page, with a figure and a sentence releasing it from everything else. The figure attracts all the attention; the sentence does the work. Signed without being read closely, it can close claims nobody has yet discovered, bind people who were never asked, or leave the business waiting for money it has no means to enforce.

A settlement is a contract, and it has to be drafted and read as one. Whether you are paying or being paid, its wording decides what it covers, whom it binds and how it is performed:

• the rules on what turns a letter, an offer or a receipt into a binding settlement;
• the rules on the scope of the release — which claims and heads of damage it extinguishes, and which parties it protects;
• the rules on reservations that keep an unknown or future loss open, and on the wording they need to survive;
• the rules on an insurer’s consent before its insured settles, and on the cover that may be lost by settling without it;
• the rules on settlements made on behalf of a minor or a protected adult, and on the approval they may require;
• the rules on the form and timing of payment, indexation, and security for sums payable in instalments;
• the rules on who bears legal costs, expert fees and interest up to the date of payment;
• the rules on the confidentiality of settlement talks, and on what may later be shown to a court;
• the rules on setting a settlement aside for error, fraud or pressure, and on making it enforceable without a new lawsuit.

Our lawyers can support you with this.