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Simple English definitions for legal terms
Mary Carter agreement
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A quick definition of Mary Carter agreement:
A Mary Carter agreement is a secret contract between some but not all defendants in a lawsuit and the plaintiff. The participating defendants settle with the plaintiff and are released from the lawsuit, but they also receive a portion of any money recovered from the nonparticipating defendants. The participating defendants agree to stay in the lawsuit and pay the plaintiff a set amount if no money is recovered from the nonparticipating defendants. Some states consider this agreement against public policy, but it is allowed in others if disclosed to the jury.
A more thorough explanation:
A Mary Carter agreement is a contract between one or more defendants and a plaintiff in a lawsuit. The agreement is usually kept secret and allows the participating defendants to settle with the plaintiff and be released from the lawsuit. In exchange, they receive a portion of any recovery from the nonparticipating defendants.
For example, in a personal injury case involving a car accident, one of the drivers may enter into a Mary Carter agreement with the injured party. The driver agrees to pay the injured party a certain amount of money and remain a defendant in the lawsuit. If the injured party wins the case and receives a settlement from the other driver, the participating driver will receive a portion of that settlement.
However, Mary Carter agreements are not legal in all states. Some states consider them to be against public policy and void. In other states, they are allowed but must be disclosed to the jury.
Overall, Mary Carter agreements can be a controversial tactic used in legal cases to shift liability and potentially influence the outcome of a lawsuit.