When a lawsuit is initiated, there’s often considerable paperwork that goes back and forth at the outset. This applies whether the matter involves a boating accident, breach of contract, or crew wage dispute. In the summons and complaint, facts of the case are outlined, legal issues identified, and damages asserted. Soon after the opening salvos, discovery requests are made and the parties can lock horns about what is and what is not relevant for trial. If both sides are eventually able to agree upon terms for settlement, the trail of paperwork becomes quite abbreviated at that point. And it often comes down to just one form known as the release.
A release has tremendous importance because it spells out the terms as to how the lawsuit comes to a conclusion. While the verbiage of some releases could seem difficult to understand, as if written in old English from the days of Shakespeare, it often comes down to a simple premise, which is “We’re done here.” Here’s your money. In exchange for accepting that money, you agree to terminate your legal action against us. In other words, you’re dropping your case.
Naturally, the selection of language isn’t quite that colloquial. The language could be more along the lines of, “I, Jane Smith, in consideration of the sum of ten thousand dollars ($10,000.00), hereby agree to release John Doe from all liability for claims, known and unknown, from an accident that occurred on or about April 1, 2021.”
It’s important to read a release carefully because it would be difficult to later go back and say, “Well, things changed and I think I really need a second surgery because that joint still gives me problems.” Unfortunately, that ship has sailed if the claimant signed on the dotted line, unless there were elements such as fraud, duress, illegality, or other such elements at play. Several years ago, there was a case in federal court involving a crew member on a commercial fishing vessel. He had been hired as a deckhand. His employment contract had a provision for overseas arbitration. After signing the contract, he was injured. He underwent surgery, and in the course of his convalescence, he indicated that he wanted to settle his claim.
A settlement figure was reached between the deckhand and vessel interests. The deckhand reviewed and signed a release, which included a statement similar to the one mentioned above. It said, “This is a release. I am giving up every right I have.” A maritime arbitrator entered an order and issued an arbitral award at the time.
Several years later, the deckhand brought legal action against the vessel interests for negligence, unseaworthiness, maintenance and cure, and wages. At the time (before remand), the court ruled in favor of the vessel interests, giving weight to the release.
It’s important to understand the finality of a release in such settings. If someone is injured in an accident and there could be a possibility of future damages yet to be determined, that has to be weighed. If additional damages materialize, that’s usually too bad for the claimant, as releases generally contain wording to the effect that they are for damages known and unknown.
Releases could contain other important provisions. This could include a statement that the release does not constitute and admission of liability. In other words, “We do not admit to fault, we’re just settling this claim.” Another provision could be that only the person paying the claim at hand is being released. This could be relevant in multi-party litigation where one claim is concluded, but other claims against different parties, possibly for different legal causes of action remain open.
Many releases will require notarization, although depending on the size of the claim, that isn’t always the case. Depending on how detailed the party drafting the release wants to get, there could be provisions for severability or restrictions on modification. Sometimes simple is best, and even major insurance companies utilize releases of several short paragraphs for even six-figure cases. The important thing to remember is that simple or complex, it pays to read a release carefully, as it could be virtually impossible to later go back and say, “I didn’t realize that’s what I was agreeing to.” Good luck in all your legal matters.
Ref: Castro v. Tri Marine Fish Company, LLC et al, Case No. C17-8RSL, U.S. District Court, Western District of Washington at Seattle
Tim Akpinar is a NY based maritime attorney and has taught law at SUNY Maritime College