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Why are car accident settlement agreements confidential?


When a Southern California resident thinks about filing a personal injury lawsuit in the aftermath of a car accident, the thought may be intimidating. Many people will likely imagine that if they file a lawsuit they will someday have to sit in a courtroom in front of dozens of people, all while some defense attorney attempts to make the jury believe that they are lying. However, while some cases do indeed proceed all the way to a trial, many cases are resolved through a settlement agreement.

Most of our readers are probably familiar with the concept of a settlement agreement. These agreements, particularly in personal injury cases, such as those involving car accidents, are more common than jury trials. In most settlement agreements, the defendant will usually agree to pay the plaintiff a set amount of money, and then the case is dismissed.

But, what many people probably wonder is why are car accident settlement agreements confidential? Confidentiality is one of the bedrock aspects of almost all settlement agreements, and many such agreements will actually have a clause that provides for repercussions if the confidentiality is breached.

Settlement agreements are confidential mainly because neither side, but especially the defendant, is admitting fault in any way. For instance, when a high-profile case is resolved via a settlement agreement, most people will only hear that the case is over - they won't hear details of how much money was involved, or if there were any other terms reached. This confidentiality is one of the reasons some defendants are inclined to settle a case as opposed to taking it to trial.

Source: americanbar.org, "Confidentiality in Settlement Agreements Is a Virtual Necessity," Gregg Stevens and Lorin Subar, Accessed Sep. 10, 2016

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