Settlement and Alternative Dispute Resolution
Settlement Structures
A consent judgment embodies the parties' agreed resolution in a judgment the court enters. It is enforceable through execution and contempt and generally carries preclusive effect on the claims resolved.
In insurance disputes it frequently accompanies a covenant not to execute.
Alternative Names:
Agreed Judgment, Stipulated Judgment
Why it Matters?
The consent judgment plus covenant not to execute plus assignment structure is how a coverage dispute reaches a carrier that denied defense, since the insured stipulates to a judgment it will not have to pay and assigns its claims against the insurer. Several states scrutinize these arrangements for reasonableness and collusion, particularly where the carrier was defending under a reservation of rights and the insured cooperated in an inflated figure.
Frequently Confused with
Related terms
Frequently asked questions
How is a consent judgment used in coverage disputes?
How do courts scrutinize these arrangements?
