What Is a High-Low Agreement in Personal Injury?

James Wong — Founder & Pharmacist, LienScripts | March 8, 2024 | 7 min read

A high-low agreement is a pre-trial contract between the plaintiff and defendant that guarantees the plaintiff a minimum recovery ('low') while capping the defendant's maximum exposure ('high'), regardless of the jury verdict. It eliminates trial risk for both sides while allowing the case to proceed to trial.

This post is for informational purposes only and does not constitute legal advice.

Managing Trial Risk Without Settling

The weeks leading up to a personal injury trial often involve a gap between what the plaintiff is willing to accept and what the defendant is willing to pay. Settlement talks break down. Both sides face genuine trial risk.

A high-low agreement is a contractual solution that allows the case to go to trial while protecting both parties from the worst-case outcome. The parties agree before trial that:

• If the jury awards more than the high: the plaintiff receives only the high (the defendant's ceiling)
• If the jury awards less than the low: the plaintiff receives the low (the plaintiff's floor)
• If the jury awards between the high and low: the plaintiff receives the jury's actual verdict

[!KEY] A high-low agreement guarantees the plaintiff a minimum recovery and caps the defendant's maximum exposure regardless of the jury verdict — but the "low" must be sufficient to cover all lien obligations, fees, and costs before the floor is agreed upon.

The jury does not know about the agreement. The case proceeds as if no deal exists.

Example

Plaintiff's position: Case is worth $800,000. Will not accept less than $250,000 to settle.

Defendant's position: Case is worth $150,000. Will not pay more than $400,000 to settle.

High-low agreement:

• Low: $200,000
• High: $550,000

Possible outcomes:

• Jury awards $50,000 → Plaintiff receives $200,000 (the low)
• Jury awards $400,000 → Plaintiff receives $400,000 (the actual verdict)
• Jury awards $1,200,000 → Plaintiff receives $550,000 (the high)

Both parties get certainty at the extremes while preserving their upside within the range.

[!KEY] A high-low agreement converts a binary trial outcome (win or lose) into a bounded range — the "low" guarantees the plaintiff can satisfy liens and fees without a zero recovery, and the attorney must calculate whether the floor is actually sufficient for that purpose before agreeing to it.

Why Parties Enter High-Low Agreements

For plaintiffs, a high-low agreement:

• Eliminates the risk of a defense verdict or a low verdict that fails to cover liens and costs
• Guarantees a minimum recovery sufficient to satisfy pharmacy liens, medical liens, and attorney fees
• Allows the client to participate in a trial that might produce a significantly better result

For defendants (and their insurers), a high-low agreement:

• Caps liability exposure at a known maximum, eliminating catastrophic verdict risk
• Allows the defense to maintain litigation positions while removing tail risk
• Preserves the right to a jury determination of fault and damages

Timing: When High-Low Agreements Are Made

High-low agreements are almost always made shortly before or during trial — typically after mediation has failed or after opening statements. By this point, both sides have seen the evidence, assessed jury composition, and experienced the courtroom dynamics.

Some high-low agreements are reached:

• During jury selection (voir dire)
• After opening statements
• Mid-trial if a particularly damaging witness or exhibit shifts the risk calculus
• Before a verdict is delivered (though this is less common)

High-Low Agreements and Lien Payoffs

The minimum recovery guaranteed by the "low" is the floor that allows attorneys to plan lien payoffs and ensure the client receives something. Without a high-low agreement, a defense verdict would result in zero recovery — and no ability to pay any liens.

For pharmacy lien purposes, the critical question when a high-low agreement is in place is: does the low recovery provide enough to pay all liens, attorney fees, and costs while leaving the client a meaningful net recovery?

If the low is insufficient to cover all lien obligations at full value, this is the time to initiate lien reduction negotiations before trial. Lienholders — including pharmacy lien administrators like LienScripts — can often be approached with a proposed reduction based on the realistic range of outcomes defined by the high-low bracket.

[!KEY] The high-low bracket defines a realistic recovery range that can be shared with lien holders to support pre-trial reduction requests — a lienholder who understands the defined ceiling and floor is better positioned to agree to a proportionate reduction than one who is negotiating in the abstract.

The made-whole doctrine applies equally in high-low scenarios: if even the "high" would not make the plaintiff whole, lienholders should proportionally reduce their claims.

What Happens If the Jury Returns a Defense Verdict

Under a high-low agreement, a defense verdict (zero dollars for the plaintiff) still results in the plaintiff receiving the "low" amount. This is the most common motivating scenario for plaintiffs: the risk of a defense verdict is eliminated.

Some high-low agreements include specific language about how the payment is characterized — for example, whether it is treated as a settlement or as a judgment — which can have tax and fee implications.

[!TIP] For Attorneys: Before agreeing to the "low" in a high-low agreement, calculate whether it covers attorney fees, all lien balances, and leaves the client a meaningful net recovery — if not, initiate lien reduction discussions with LienScripts and other lienholders before trial begins.

High-Low Agreements vs. Mary Carter Agreements

A Mary Carter agreement is a different type of pre-trial arrangement in which one defendant settles while remaining in the case as a defendant, with a financial interest in the plaintiff's recovery against the remaining co-defendants. High-low agreements do not involve this structure — they simply set floor and ceiling values on a single defendant's liability.

California courts have scrutinized Mary Carter agreements as potentially prejudicial to non-settling defendants. High-low agreements do not carry the same concerns because the arrangement does not alter the aligned interests at trial.

Key Takeaway

A high-low agreement is a risk management tool that guarantees the plaintiff a minimum recovery while capping the defendant's maximum exposure, regardless of the jury verdict. It is used when settlement is not possible but both parties want to limit their worst-case outcomes. For cases with significant pharmacy liens and medical liens, ensuring the "low" is sufficient to cover lien obligations is a critical planning step before agreeing to the floor figure — and may require initiating lien reduction discussions with LienScripts and other lienholders before trial begins.