A judgment sharing agreement is a legal contract between two or more parties to share the proceeds of a judgment. This type of agreement is common among plaintiffs and their attorneys, but it can also be used between defendants who are jointly liable for damages.
The purpose of a judgment sharing agreement is to ensure that all parties receive a fair share of the judgment proceeds. This is particularly important in cases where there are multiple plaintiffs or defendants, as the apportionment of damages can be complex.
In a typical judgment sharing agreement, each party agrees to share a certain percentage of the judgment proceeds with the others. For example, if three plaintiffs are awarded a judgment of $1 million, they might agree to split the proceeds equally, with each receiving $333,333.
The agreement will also typically include provisions for the payment of attorney fees and costs. In many cases, the plaintiffs` attorneys will take a percentage of the judgment as their fee, and these fees will be deducted from the total amount of the judgment before it is distributed among the parties.
One important consideration when entering into a judgment sharing agreement is the issue of tax liability. Depending on the nature of the judgment and the parties involved, the proceeds of the judgment may be taxable income. It is important to consult with a tax professional to understand the tax implications of the agreement.
Another consideration is the enforceability of the agreement. In some cases, a judgment sharing agreement may not be enforceable if it violates public policy or any applicable laws. It is important to consult with an attorney to ensure that the agreement is legally binding and enforceable.
Overall, a judgment sharing agreement can be a useful tool for ensuring that all parties receive a fair share of the proceeds of a judgment. However, it is important to carefully consider the terms of the agreement and to consult with legal and tax professionals before entering into any such agreement.