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Settlement

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Overview of the State of Maryland Court System


Content:

Settlement


A. Offer of Judgment


Not applicable in Maryland.

B. Liens


A medical provider (not workers’ compensation) has a lien on 50% of the recovery of a patient from a cause of action against a person who caused the patient’s injury. The medical providers does not have a right to bring the action on behalf of the patient.

A worker’s compensation carrier has a lien up to the amount paid. The carrier can bring the action on the patient’s behalf. Except for costs and fees to pursue the action, the settlement amount or judgment is first paid to the compensation carrier to cover the lien and to cover expected future expenses. The balance goes to the patient.

C. Minor Settlement


Maryland does not require court approval of minor or infant settlements. Maryland only requires that payments/judgments exceeding $5,000 be written to the trustee under Title 13 of the Estates and Trusts Article, Annotated Code of Maryland, for the named minor.

However, a minor cannot contract his rights away. Therefore, any individual or entity which enters into a settlement should institute a “friendly suit” in order to preclude further litigation. Once approved, the court will sign an order entering such judgment binding the minor to the settlement with the adverse party.

D. Negotiating Directly With Attorneys


It depends. If the claims professional is directly employed by the Defendant and the Defendant is represented, then Plaintiff’s attorneys should not negotiate directly with a represented party. However, if the claims professional is employed by an insurance company or third party administrator, then there is no restriction on negotiating directly with Plaintiff’s counsel. Maryland does not require court approval of minor or infant settlements. Maryland only requires that payments/judgments exceeding $5,000 be written to the trustee under Title 13 of the Estates and Trusts Article, Annotated Code of Maryland, for the named minor.

However, a minor cannot contract his rights away. Therefore, any individual or entity which enters into a settlement should institute a “friendly suit” in order to preclude further litigation. Once approved, the court will sign an order entering such judgment binding the minor to the settlement with the adverse party.

E. Confidentiality Agreements


Confidentiality agreements are allowed in Maryland as long as some consideration is given. For example, if $100 consideration inclusive of the settlement amount is given for Plaintiff to agree to confidentiality, then it will be upheld.

F. Releases


A notary is not required for a release in Maryland. Generally, it is the duty of the party signing the release to ask questions if he does not understand it. Therefore, if the person cannot read English, it is up to that person to request a translation. If such a request is made, then a translation should be made to protect the validity of the executed release.

A release by the injured person of one joint tortfeasor, whether before or after judgment, does not discharge the other tortfeasors unless the release so provides, but it reduces the claim against the other tortfeasors in the amount of the consideration paid for the release or in any amount or proportion by which the release provides that the total claim shall be reduced, if greater than the consideration paid. Md. Code Ann., [Cts. & Jud. Proc.] § 3-1404 (1999).


G. Voidable Releases


Generally, a release can only be voided unilaterally for fraud. The general fraud determination in overturning contracts would be the same considerations in voiding a release


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Overview of the State of Maryland Court System

PDF version of the entire overview

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