J. Principle 10: Think of Settlement as a Process That Continues until All Terms Are Fulfilled

• Library: Crafting Effective Settlement Agreements: A Guidebook for Attorneys and Mediators (ABA) (2018 Ed.)

J. Principle 10: Think of Settlement as a Process That Continues Until All Terms Are Fulfilled

It ain't over till it's over.

— Yogi Berra

The value of a settlement agreement does not end with the drying of the parties' signatures. Instead, the function of a settlement agreement begins when the parties make it legally binding. Only when the settlement agreement is enforceable does it compel defendants to make the promised payments, plaintiffs to dismiss their cases, and parties to maintain confidentiality as defined by their agreement. Properly viewed, a settlement agreement is valuable only to the extent that it achieves the parties' actual fulfillment of the duties to which they agreed. Some of those duties—for example, securing court approval or dismissing the lawsuit—will fall to the parties' attorneys. Attorneys should catalog their duties under the settlement agreement, calendar important milestones, and take the necessary actions for their clients.

1. Interacting with the Court to Conclusively Resolve the Legal Claims

After a settlement agreement is signed, attorneys likely have duties to interact with the court. These may include:

Moving for court approval. If the settlement agreement is made on behalf of a minor or incapacitated person or involved a class-action lawsuit, the settlement agreement must have court approval to become effective. Attorneys may also need to seek court approval of the settlement agreement if the terms of the agreement are to be incorporated in a consent decree or judgment as a means for expedient enforcement. If the settlement agreement includes an agreement to cooperate between the settling parties against any nonsettling parties, there is a good chance that the agreement will require court review and approval. In these circumstances, parties to the settlement should agree to file a joint motion for court approval.

Providing notice of the settlement. In many jurisdictions, rules of court or statutes impose a requirement on attorneys to promptly notify the court when a pending case settles.²⁸⁹ Because courts are increasingly willing to sanction counsel for being dilatory in giving notice of settlement, attorneys should be sure to calendar this task as soon as possible after the settlement agreement is signed. However, attorneys should be clear to distinguish between a statutory requirement to give a court notice of settlement and a settlement agreement's requirement that the case be dismissed because there can be years of difference between these two deadlines. Parties can choose to structure the terms of a settlement agreement to provide that a trial court retain jurisdiction over the case to enforce terms of the...