If you are the defendant, you must ensure that all counterparty affiliates are covered by the claims release in order to expand the scope of the agreement. But even if you are able to make a claim, you may be willing to include such a provision if none of your affiliates would have a viable claim in any case. It is also important to specify in the settlement agreement whether the waiver of claims is based on reciprocity. For example, if only one party has brought claims in an ongoing dispute, you may want the settlement agreement to release not only the claims claimed in the dispute, but also any claims the defendant may have in connection with the same underlying events. In many cases, the inclusion of a confidentiality clause in a settlement agreement is required. If these clauses are included, the parties and their lawyers cannot disclose how the agreement was reached. While both parties can benefit from confidentiality clauses in a settlement agreement, they are particularly beneficial for defendants. GOL § 15-108 (a) provides that if a plaintiff agrees with one of the defendants, the plaintiff`s recovery from the remaining defendants is reduced by the higher amount of the amount paid in the settlement or by the fair share of the defendant`s fault as divided by the jury. The law requires disclosure of the settlement amount of the confidential agreement, but only after a verdict has been rendered against the unsolved defendants to determine the distribution after the verdict. Matter of Steam Pipe Explosion, 128 A.D.3d 493 (1st department 2015).

Even an erroneous breach of a confidentiality provision can result in damages, whether the breach is due to the conduct of the client or the lawyer. As a result, many lawyers discuss with their clients the importance of complying with the confidentiality provisions of the settlement agreement, especially in the age of social media. In situations where a large number of customer representatives are aware of a settlement, it may be desirable to include in the agreement conditions that only the disclosure of certain detailed settlement terms can be considered a breach of the agreement. Otherwise, in the event of a breach, the infringing party may be required to reimburse the proceeds of the settlement or pay other damages. With a confidential settlement agreement, the number of people who have access to the terms of the settlement is limited. In addition to the parties to the agreement and their lawyers, the families of the parties and possibly a tax administration may have information about the case. Appleyard shows that the question of whether a confidential settlement should be disclosed is determined by new York court standards to clarify issues relating to the disclosure of documents and information, i.e. whether the requested information is material and necessary for the prosecution and/or defense of the lawsuit. In Appleyard, the General Court held that the Regulation was not essential and necessary because of the speculative reasons justifying the search for the conditions of the Regulation and because the Regulation was not relevant to the settlement of the action. It is not uncommon for parties settling a lawsuit to negotiate a confidentiality provision that prohibits them from disclosing the terms of their agreement.

While there may be reasons to require secrecy (a topic for another day), courts are often grappling with the circumstances in which disclosure is warranted. In Appleyard v. Tigges, 2019 N.Y. Slip Op. 29373 (Sup. Ct., Bronx County Dec. 6, 2019) (here) the court refused to order the disclosure of a confidential settlement between the plaintiff and one of the defendants because the claim was made for purely tactical reasons and not to determine the underlying issue of fault and damages. If companies decide to resolve issues amicably, the settlement agreement must accurately reflect the compromise reached by the parties.

Too often, the focus is solely on the amount to be paid in exchange for the release of claims, but there are other equally important considerations that need to be addressed. Regardless of when the settlement is reached, the terms of a settlement can have an impact long after the procedure is dismissed. One term that parties and lawyers often discuss at length is whether to include a confidentiality clause. For some, confidentiality is a necessary term for any agreement, while others want the right to publicly discuss the terms of the agreement. Most disputes are resolved, so it`s important for legal teams to be aware of the most important issues related to drafting a settlement agreement. This is especially true now that businesses around the world are grappling with the COVID-19 pandemic and the resulting pressure on supply chains and business relationships. Confidentiality clauses in settlement agreements may contain a number of restrictions. Many confidentiality provisions prohibit parties from disclosing the terms of the settlement. Others may go further to exclude disclosure of the nature of the dispute, the facts underlying the allegations, and any disclosure exchanged. While many states have enforced confidential regulations that prohibit the attorney from disclosing certain settlement conditions, various state bar associations have issued ethical opinions prohibiting parties from agreeing to keep confidential information already in public records. .