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Settlement Releases that Re-Victimize the Victim

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An increasing amount of settlement releases now contain non-disparagement clauses which restricts the plaintiff and their attorney from making any seemingly unfavorable comments about the defendant. Doing so would violate the agreement and expose them to a lawsuit.

A loved one is killed—a person is catastrophically injured. They seek a measure of justice for the wrong done to them and their family.

It appears that some corporate defendants are now asking the question: what additional punishment can we extract from these victims for their temerity in seeking justice?

Their answer seems to be: if you want to settle with us for reasonable compensation for the losses and harms we caused you, we will require that you give up your right to freedom of speech, require your lawyers to do the same, and expose you to future legal action by the corporate wrongdoer. If you don’t like it, too bad: try the case. Take a look at the price now being asked of plaintiffs who want to put the case behind them.

The demands that some defendants are now making as part of a settlement agreement have nothing to do with the value of the settlement, nor righting any wrong that has been committed in the past. Not satisfied with the protection of laws against defamation and disparagement that exist in every state, some corporations now want to extract more than their peace. Some settlement agreements are now showing up admonishing the victims against disparaging the company that acted negligently or recklessly, insisting on clauses that threaten the victims with corporate attorney’s fees and costs even if a mere technical, inadvertent, harmless, breach occurs.

Worse, I recently saw a clause that demanded the victim agree that any “breach” would automatically result in “irreparable harm,” whether real or not; not only that but the tortfeasor—the wrongdoer—threatens in the release that the bereaved family or suffering victim pay their attorneys’ fees and costs for any alleged breach, no matter how trivial.  Such a provision would saddle a plaintiff with fear that anything they might say against a defendant would result in draconian monetary penalties, no matter how reprehensible the conduct or how insignificant the “breach.”  So, say these release clauses, to settle you must give up your first amendment constitutional right to engage in the public debate over the conduct of this defendant—forever. Such clauses are designed to instill fear that you might give your honest opinion or say something—even if true—that the corporation says contravenes the agreement, and you will be sued over it.

For instance:  Assume a car made by company “G” has a defect that it covers up for years and that that defect killed the husband of “P.”  G offers a settlement to P for an amount P is willing to accept as an alternative to a lengthy and stressful trial.  But, the release has a non-disparagement clause.  Assume, after settlement, P learns that her friend’s husband is killed in an identical way by the same defect in company G’s car.  If she is interviewed by the press and says she is shocked that G didn’t fix that dangerous defective car or take it off the road before it kills again, she could be sued by G and its legions of highly paid lawyers, who then could come after her with monstrous attorney’s fees, not to mention the stress of litigation—even if the corporation had not suffered any actual harm.

These sorts of provisions in releases are nothing short of an attempt to victimize the injured party or survivors of tragedy a second time.  Equally bad, they stifle public debate over safety.  They are intimidating, to say the least.  In my opinion, the demand for such clauses should be deemed unethical, unlawful, and unenforceable as against sound public policy.


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