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  • Writer's pictureRobert Schuerger II

How Do NDAs Work in Personal Injury Lawsuit Settlements - What Victims Must Know

Personal injury settlements are often confusing at first glance, and each one is different based on the case at hand. Once the victim and at-fault party reach an agreement, the insurance company might want to keep everything confidential. What happens then?

A personal injury claim could involve the victim signing an NDA (non-disclosure agreement). In this case, all parties involved will have to keep the information confidential. How do NDAs work in personal injury lawsuit settlements? It's a question on everyone's mind.

Let's learn more about non-disclosure agreements for victims suffering from minor or serious injuries and how Schuerger Shunnarah Trial Attorneys could help them get the most compensation possible. They can also explain the benefits of how to take notes after an accident or injury.

What's a Non-disclosure Agreement?

What's a Non-disclosure Agreement?

Non-disclosure agreements are called NDAs and are used in various business transactions and legal claims. Basically, a nondisclosure agreement is a legal contract, but it might be a confidentiality clause in the contract. Both parties must:

  • Agree to not disclose any information about the transaction

  • Promise to keep all the terms (and the existence in some cases) of the agreement confidential

For personal injury cases, it's often easy to see why someone would want to keep the terms and existence of the settlement and the dispute/situation itself protected after paying significant amounts of money to settle a claim. They wish to avoid damaging other people's reputations and careers and will do anything to achieve that goal.

However, what about more traditional legal disputes, including slip and fall and car accidents? Do they require or use NDAs? They could! Schuerger Shunnarah Trial Attorneys can also explain how settlement negotiation works in an injury case.

Why Have an NDA for a Personal Injury Settlement Agreement

The injured victim (plaintiff) might want to have an NDA for many reasons. For example, it would prevent the person's physical injuries from becoming part of the public record. Most people don't want everyone to know the medical treatment specifics they required to heal.

Likewise, the victim might get a larger settlement award if they have an NDA in place. The at-fault party performed wrongful conduct that led the plaintiff to get injured. They don't want that information given to the public, either.

Insurance Companies Might Want NDAs

The defendant (wrongdoer) might also want an NDA or think it's necessary. In typical personal injury settlement agreements, the insurance company pays for the at-fault party's mistake. It often deals with various claims, and it wants to keep that information out of public knowledge. Otherwise, the company might find itself getting more claims than it can handle or being made to pay more than normal.

Typically, there's a bigger concern when the incident is highly publicized. There could be a huge flood of claims if everyone learned that one case got a multi-million-dollar settlement.

What's an NDA Look Like?

In most cases, a well-drafted NDA will:

  • Declare that if anyone breaks the NDA, they will have to pay an amount agreed upon in the document itself to the other party. This is often called a liquidated damages clause. It doesn't matter what the particulars are; there will likely be some penalty added to the NDA, which gets triggered whenever the terms are violated.

  • Make it clear that the injured victim can disclose all terms to any accountants, attorneys, spouses, and other people who might have a legitimate need of the knowledge.

  • State that the terms and existence of the settlement are to be confidential.

Sometimes, the confidentiality provision requires all parties to be recorded while reading a script. This is typically done in high-profile cases, but anyone could be asked to provide this.

Likewise, many confidential settlement agreements allow people to discuss things vaguely and will provide a written account of what can be said. For example, the NDA might say that when someone inquires about the case, the parties can answer that the matter was amicably resolved to everyone's satisfaction and that the terms of the settlement are fully confidential.

The benefit of having this provision is that it will avoid arguments about who disclosed confidential information that violated the NDA. Parties must stick to the script, so there's no legal gray area about what can/can't be said.

What Happens When Victims Break the Confidentiality Agreement in the Personal Injury Case

What Happens When Victims Break the Confidentiality Agreement in the Personal Injury Case

Confidentiality provisions often state that there are penalties that must be paid to the other party when the agreement is violated. This could include paying liquidated damages or returning the full settlement agreement amount.

Often, NDAs provide within that a violating party who fails to pay the penalty required must pay for all attorney's fees and costs the insurer incurs while trying to recover that money in future legal proceedings.

Protecting Oneself

The consequences of violating the NDA are often severe. Therefore, injury victims can do a few things to protect themselves from problems if a breach happens. These include:

NDAs Often Boost Personal Injury Settlements

If the insurer insists on a confidentiality clause, a personal injury attorney in Nashville should negotiate for more money during settlement negotiations. For example, if the case settles for $50,000, the lawyer might ask for $5,000 for signing the NDA.

Settlement agreements could be subjected to taxes, as well. If the victim doesn't want to go to tax court, it's wise to understand what they might have to pay.

NDAs Can Keep Penalties and Liquidated Damages Reasonable

The victim's attorney should also focus on limiting the damages for violating the confidential settlement agreement (confidentiality clause). If the victim agreed to an NDA and received $5,000 more for that and violated the agreement, their settlement amount would be lowered by $7,500.

Get Help with a Personal Injury Case Through Schuerger Shunnarah Trial Attorneys

Before signing an NDA as part of any personal injury case, the victim must be in a position to get a fair settlement by the insurance company of the at-fault party for their personal injuries. This takes work because they must prove the other person is responsible, establish the extent of the damages through evidence, and fight for the best results. That's not easy to do alone.

Therefore, it's best to call Schuerger Shunnarah Trial Attorneys or use the online contact form for a free consultation. Victims can determine if they have a strong claim and go from there.


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