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High Low Settlement Agreement for Germany

High Low Settlement Agreement Template for Germany

This document is a specialized settlement agreement governed by German law that establishes predetermined maximum and minimum settlement amounts while allowing the final settlement figure to be determined by a specific event or decision. The agreement combines elements of German civil law (BGB) regarding settlements (Vergleich) with risk management principles, providing parties with certainty about their maximum exposure while preserving the opportunity for a more favorable outcome. It incorporates specific requirements under German contract law and civil procedure, including provisions for enforceability under §794 ZPO, while maintaining flexibility in structure to accommodate various dispute resolution scenarios.

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What is a High Low Settlement Agreement?

The High-Low Settlement Agreement serves as a risk management tool in German legal proceedings, providing parties with a guaranteed minimum recovery while capping maximum liability. This document type is particularly useful in cases where parties wish to avoid the extremes of a traditional all-or-nothing litigation outcome. Under German law, these agreements must comply with the BGB's requirements for settlements (Vergleich) and contract formation, while also considering civil procedure rules for enforcement. The agreement typically specifies high and low settlement amounts, triggering events, payment terms, and release provisions. It's commonly used in insurance disputes, personal injury cases, and commercial litigation where parties seek to manage their risk exposure while maintaining the possibility of a more favorable outcome. The High-Low Settlement Agreement must be carefully drafted to ensure compatibility with German legal principles of good faith (Treu und Glauben) and public policy considerations.

What sections should be included in a High Low Settlement Agreement?

1. Parties: Identification and details of all parties to the agreement, including any relevant insurance carriers

2. Background: Description of the underlying dispute, claim, or circumstances leading to the agreement

3. Definitions: Key terms used in the agreement, including 'High Amount', 'Low Amount', and 'Triggering Event'

4. Settlement Parameters: Specification of the high and low amounts and the circumstances under which each would apply

5. Payment Terms: Conditions and timing for payment, including any installment arrangements

6. Triggering Events: Detailed description of events or conditions that determine the final settlement amount

7. Release Provisions: Mutual releases and waivers of claims within the context of the high-low parameters

8. Confidentiality: Provisions regarding the confidentiality of the agreement terms and negotiations

9. Governing Law and Jurisdiction: Specification of German law as governing law and relevant jurisdiction

10. Execution: Signature requirements and effective date provisions

What sections are optional to include in a High Low Settlement Agreement?

1. Insurance Provisions: Required when insurance companies are involved, detailing their rights and obligations

2. Multiple Party Provisions: Needed when there are multiple plaintiffs or defendants, specifying how the high-low limits apply

3. Court Approval: Required when the agreement needs court validation or relates to ongoing court proceedings

4. Tax Implications: Include when settlement amounts have significant tax consequences requiring specific handling

5. Alternative Dispute Resolution: Optional provisions for handling disputes about the agreement interpretation

6. Assignment Rights: Include when transfer of rights under the agreement needs to be addressed

7. Severability: Optional clause addressing the survival of provisions if parts are found invalid

What schedules should be included in a High Low Settlement Agreement?

1. Schedule A - Calculation Method: Detailed methodology for calculating final settlement amount within the high-low range

2. Schedule B - Payment Schedule: If applicable, detailed payment terms and conditions

3. Schedule C - Claims Documentation: List of relevant claims, damages, or losses covered by the agreement

4. Schedule D - Procedural Requirements: Any specific procedures or requirements for implementing the agreement

5. Appendix 1 - Related Court Documents: Copies of relevant court filings or orders

6. Appendix 2 - Insurance Policies: Relevant insurance policies if insurance companies are involved

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions






























Clauses





























Relevant Industries

Insurance

Legal Services

Financial Services

Healthcare

Construction

Manufacturing

Transportation

Professional Services

Real Estate

Industrial

Relevant Teams

Legal

Risk Management

Compliance

Insurance

Claims Processing

Corporate Affairs

Dispute Resolution

Contract Administration

Legal Operations

Regulatory Affairs

Relevant Roles

Legal Counsel

Claims Manager

Risk Manager

Insurance Underwriter

Compliance Officer

Corporate Attorney

Litigation Manager

Settlement Administrator

Legal Operations Manager

Contract Manager

General Counsel

Chief Legal Officer

Insurance Claims Adjuster

Dispute Resolution Specialist

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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