What is a Confidential Settlement?

Posted on February 3, 2015

What is a Confidential Settlement?

There is so much that goes on in the personal injury lawsuit process that it can seem very strange to people who are not familiar with it. One of these is the confidential settlement agreement. Even though not all personal injury lawsuits result in settlements, and not all settlements are confidential, knowing what a confidential settlement is can help you understand how the personal injury lawsuit process works.

Demand Letters, Lawsuits, Trials, and Settlements

When people get hurt they often visit a lawyer so they can file a lawsuit. But the personal injury lawsuit process doesn’t necessarily begin immediately thereafter. In many, if not most, personal injury cases, the case begins after your lawyer sends a demand letter to the defendant. (The defendant is the person or organization you believe caused you your injuries.) The demand letter states the basis for any lawsuit you might file, explains the nature of your injuries, and asks the defendant to pay money in compensation.

If the defendant doesn’t agree to your demands, you can then file a lawsuit. After filing the lawsuit, both sides will begin the discovery process. During the discovery process, each side will try to uncover the facts of the case. After discovery ends and your case goes to trial, you will present evidence to try to show that the defendant is at fault for your injuries.

At any stage of this process, from the demand letter to before the trial ends, you and the defendant can agree to a settlement. Settlement agreements usually involve the defendant agreeing to pay you (the plaintiff) money, while you agree to drop your lawsuit and release the defendant from any further liability.

Settlement Agreements

When the two sides of a lawsuit agree to a settlement, they set out the terms in a document called the settlement agreement. For example, settlement agreements typically begin with a brief statement of the history of the lawsuit, then state the terms to which the two sides agree. The agreement will also state the exact amount of money the defendant agrees to pay and state that the plaintiff will agree to dismiss the lawsuit.

The agreement might also state what, if anything, either side of the lawsuit is allowed to say after they agree to the settlement terms. Settlement agreements that contain these restrictions are known as confidential settlements.

Confidential Settlements

A confidential settlement can place any number of restrictions on what the parties (defendant and plaintiff) can say about the case. For example, the confidential settlement agreement might state that the plaintiff cannot say how much money he or she won in the settlement. It might also state that the defendant does not admit to engaging in any wrongful activity and that the defendant is allowed to say so in any public statement they choose to make.

The terms of any settlement agreement, as well as the restrictions imposed by a confidentiality clause, can be very complicated. If you ever need advice about a potential settlement, or have legal questions of any kind, you should speak with a personal injury attorney right away.


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