A High/Low is an agreement made between the attorneys for the plaintiff and defendant (with the client’s approval) either at arbitration or trial.
The “Low” provides a guaranteed minimum amount of money you receive if you lose your case.
The “High” is a cap or maximum amount of money you can receive even if you obtain a decision, judgment or verdict for more than the agreed amount.
You need consent from the insurance company to arbitrate and they usually do not agree without a High/Low.
At a typical arbitration in New York, your case is heard by an arbitrator who provides a final decision binding on both sides. The arbitrator is employed by a private company which is paid by both sides.
Arbitration will usually speed up a case; takes 2 hours instead of a week at trial; and can cost $1,500 instead of $15,000-$25,000 for a trial.
Although you don’t need the insurance company to agree to a trial, they frequently try hard to convince plaintiff’s attorneys to agree to a High/Low at trial. A lot of attorneys agree.
We never agree to a High/Low agreement at trial (unless there is an additional and substantial advantage or our client wants it) because it usually mostly benefits the plaintiff’s attorneys by insuring that we get our money back for the trial expenses.
The High or cap has extreme value to the insurance company because it guarantees their insured won’t be liable for any money above the insurance policy and guarantees the insurance company won’t become liable to pay a verdict above the insurance policy.
An example of why we don’t agree to High/Low agreements is a wrongful death case where the family of a woman who died agreed to cap the jury verdict at $2.9 million. The jury gave a verdict of $31 million against a hospital but the family could only receive $2.9 million. The family was represented by a well-known attorney partner at a well-known law firm.