High-Low Agreement
A pretrial deal that caps a defendant's exposure and guarantees a plaintiff a minimum recovery regardless of verdict.
A high-low agreement is a private contract entered before or during trial in which the parties agree in advance to bound the outcome. The plaintiff is guaranteed a minimum payment, the low, no matter how unfavorable the jury's verdict turns out to be, including a defense verdict of zero, and the defendant's payment is capped at a maximum, the high, no matter how large the jury's award turns out to be. If the actual verdict falls between the two figures, it is typically paid as rendered; if it falls outside the range, the low or high figure controls instead.
The appeal of a high-low agreement is that it lets both sides keep the benefits of a jury trial, such as resolving disputed liability or building a public record, while eliminating the tail risk each side fears most: a defense verdict wiping out a genuinely injured plaintiff's recovery, or a runaway verdict devastating a defendant on a case with real liability uncertainty. It is especially common where liability is genuinely contested but damages, if liability is found, could be severe.
Because the agreement is usually kept confidential from the jury so it does not influence deliberations, careful drafting matters: the parties need to specify how comparative-fault reductions interact with the range, what happens on a mistrial or hung jury, whether post-verdict motions like remittitur can still be pursued within the agreed range, and whether the deal survives an appeal. Courts in most jurisdictions enforce a properly drafted high-low agreement as a binding contract independent of the verdict itself.
Payout = max(low, min(verdict, high))
How it actually shows up
Defense counsel and insurers use high-low agreements to cap catastrophic exposure while still letting a case go to verdict, and plaintiffs' counsel use them to guarantee a floor recovery in cases where liability is genuinely uncertain. Both sides effectively narrow the outcome distribution before the jury ever deliberates.
- What is a high-low agreement in litigation?
- It is a pretrial contract that bounds the outcome of a jury trial: the plaintiff is guaranteed a minimum payment regardless of the verdict, and the defendant's payment is capped at a maximum regardless of how large the jury's award is. A verdict falling inside that range is generally paid as rendered.
- Does the jury know about a high-low agreement?
- Usually not. The agreement is typically kept confidential from the jury so it does not affect their deliberations or perception of the case, and it is disclosed to the court and enforced only after the verdict comes in.
- Why would a plaintiff agree to cap a potentially large verdict?
- In exchange for capping the upside, the plaintiff eliminates the risk of recovering nothing on a case with real liability uncertainty. For a plaintiff worried about losing outright, a guaranteed floor recovery is often worth more than the uncertain chance of a bigger, uncapped verdict.
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