What is a Hi-Low Agreement?
A hi-low agreement in a medical malpractice case involves a potential settlement. It involves a negotiation process, leading up to a possible settlement. The parties involved in the case are not able to come to a definite agreement, as to how much the case is worth. In such instances, the parties might say that they reach an agreement on the range of value of the particular case. For every case, there will be a range of value. There will be a low range and high range of case value.
The two parties will decide to take the case all the way to trial and let the jury decide how much the case is worth. This happens in every case when negotiations have failed, but here there is a difference. If the jury decides on an amount, there will be an agreement to put a cap on that amount, depending on what the party thinks the case is worth. On the other hand, if the jury were to award nothing, there will be an agreement for a minimum amount that the victim will receive.
What Purpose does this Agreement Serve?
This way there is a trade-off. The trade-off is that if the jury decides you are not entitled to anything, you still will get a minimum or "low" amount as agreed upon before the trial. On the other hand, if the jury comes back with a very significant reward, then the defense will have to pay only a maximum amount, which is "hi" amount that is agreed upon before the trial. Therefore, it is called a hi-low agreement.
What happens if the jury comes back with a decision to award you an amount that is somewhat in the middle of the high and low amounts of the agreement. In such instance, you will receive the amount that the jury has awarded. Therefore the hi-low agreement is simply to limit the maximum amount that the defense will pay out, and also to minimize and in fact give you a certain minimum amount of money, in the even the jury decides not to award you anything.
Taking an actual example, the high amount agreed upon is say one million dollars and the low amount is $100,000. If the jury awards you two million dollars, you will receive only one million. On the other hand, if the jury does not award you anything, you still receive $100,000. However, if you are awarded $375,000, you be able to keep this full amount.
The Judge should be Informed about the Hi-Low Agreement
Importantly, as you go to trial and you have reached a hi-low agreement, it is critical to let the judge know this information before the trial begins. It is also possible to reach this type of agreement during the course of the trial. If you have reached this agreement during the course of trial, then too, the judge should be informed about it, once the agreement is confirmed by both parties.