A release agreement is a form of contract, under which you agree to give up certain rights in exchange for something of value. In the context of an injury claim, you give up certain legal rights and claims in exchange for compensation for your injury.
When you settle a personal injury claim, you will normally be expected to sign a release agreement as part of the settlement. The release agreement will almost always be prepared by the defendant's insurance company, and will be worded in the broadest possible terms.
Frequently, the initial draft of a release agreement will be exceptionally broad.
- It is not unusual for a proposed release agreement to extend to any claims that the plaintiff may have against the defendant, even if those claims are not yet known (or are being intentionally concealed by the defendant).
- Similarly, it is not unusual for a proposed release agreement to extend to parties other than the defendant, such that any possible defendant, known or unknown is also released.
- There may be broad indemnification language requiring that the plaintiff compensate the defendant for costs and attorney fees associated with subsequent litigation, and sometimes that language is so broad as to include litigation which the plaintiff does not control and perhaps to which the plaintiff is not even a party.
A plaintiff should avoid agreeing to any terms which extend beyond the immediate parties to the agreement. A plaintiff may seek an express limitation in the settlement agreement that the only party released by the agreement is the defendant.
Similarly, a plaintiff should avoid providing a blanket release of "any and all claims" unless the plaintiff can be certain that no other claims exist. For example, a worker settling litigation over unpaid overtime shouldn't sign a release agreement that extinguishes the employer's right to bring an action over exposure to hazardous materials in the workplace - the ramifications of which may not be known or knowable for years. Similarly, a plaintiff should not sign an agreement which suggests that the plaintiff might be obligated to reimburse the defendant for a subsequent suit to which the plaintiff might unknowingly be made a party, such as a class action lawsuit filed without the plaintiff's knowledge.
Sometimes the defense lawyer, or even the plaintiff's lawyer, will insist that extremely broad language is "meaningless", and that you shouldn't worry about signing an agreement because of clauses that "have no meaning" or "won't be enforced."
In my experience, defense attorneys don't fight very hard to keep overbroad language in release agreements. In most cases they will quickly consent to the striking of any such language from the agreement. But more importantly, defense attorneys are not including the broad language because they find it to be fun to do so - they are anticipating the possibility that the language may in fact block a subsequent, unrelated lawsuit.
Further, sometimes courts issue peculiar rulings, and release language that was formerly believed to be unenforceable or to have no legal significance may suddenly become very damaging. By tailoring the release to the actual claims and issues involved in a case or claim, the plaintiff can avoid unexpected future complications.
Defense attorneys will often ask plaintiffs to sign extremely broad release forms. After all, their clients have nothing to lose and everything to gain if a plaintiff accidentally gives up another claim.
As was just suggested, defense attorneys are usually very receptive to the modification of release agreements to remove extraneous provisions and overbroad language. By the time a settlement agreement is being exchanged, the defense attorney has little incentive to draw out negotiations over a clause which that the lawyer may be simultaneously representing as "insignificant", "meaningless" or "without effect." As a matter of routine, plaintiffs and their attorneys should seek to remove any such language from settlement agreements before they are signed.