Before signing a settlement agreement for sexual assault or abuse, survivors should understand what the settlement compensates them for, what rights they are giving up by signing, and any other terms or obligations that may affect them. These agreements are generally binding once signed, so these terms should be fully understood before the settlement is finalized.
On This Page
- What Changes Once You Sign a Sexual Abuse Settlement Agreement?
- What Should the Settlement Amount Cover?
- What Rights Are You Giving Up By Signing?
- Can a Confidentiality Clause Stop You From Reporting to the Police?
- Is a Sexual Abuse Settlement Taxable?
- Are There Liens or Reimbursement Obligations?
- Does a Settlement Involving a Minor Require Court Approval?
- Sexual assault and abuse settlements provide survivors with compensation for the harm they suffered due to the abuse.
- Many settlements include confidentiality clauses that prevent survivors from discussing the terms of the agreement with others, including the media.
- If you or a loved one has experienced sexual abuse or assault and wishes to pursue a settlement, get legal help today.
What Changes Once You Sign a Sexual Abuse Settlement Agreement?
A sexual abuse settlement is an agreement between a survivor and the defendant that resolves the survivor’s claim without going to trial. In exchange for financial compensation, the survivor agrees to withdraw their claim and release their rights to pursue any further civil action. Some settlements are agreed upon before a lawsuit is filed, while others happen just before trial.
Signing a sexual abuse or assault settlement agreement generally ends a survivor’s ability to continue pursuing the settled claim or seek additional compensation later. The agreement may also create ongoing obligations, such as confidentiality or other negotiated terms. Survivors should understand exactly what rights they are releasing and what obligations will remain before signing.
What Should the Settlement Amount Cover?
Sexual abuse and assault settlements allow survivors to avoid the trauma of a trial, but still receive compensation. In general, survivors can seek compensation for a range of damages, including medical expenses, therapy costs, lost income, reduced earning capacity, pain, suffering, emotional distress, and long-term psychological effects caused by the assault.
Several factors determine the amount of compensation a survivor may be eligible for in a settlement. These include the nature, severity, duration, and frequency of abuse. Other important factors include the impacts on the survivor’s mental and physical health, the victim’s age when the harm occurred, the defendants’ resources, the strength of the evidence, and whether a cover-up occurred.
Sexual assault settlements should cover both current expenses caused by the assault and the long-term impact of the assault. You can always reject a settlement offer if you and your attorney feel the compensation offered is not fair.
What Rights Are You Giving Up By Signing?
Many settlement agreements include confidentiality clauses that prevent survivors from discussing the terms publicly. These clauses can also protect survivors’ privacy and prevent unwanted media attention.
Some agreements restrict talking about the settlement amount, while others restrict discussing the abuse, the identity of the defendant, and other aspects. You should always fully understand what you’re agreeing to before signing.
Most settlements also contain “general release” clauses, meaning that the survivor must give up the right to pursue more claims against the other party for the same incident in exchange for compensation.
Can a Confidentiality Clause Stop You From Reporting to the Police?
Civil settlement and non-disclosure agreements generally cannot prevent a survivor from reporting to law enforcement or a professional licensing board. The federal SPEAK OUT Act prohibits the enforcement of non-disclosure agreements in instances of sexual assault and harassment. Thus, they can’t be used to keep survivors from talking to police or cooperating with government investigations.
In addition, entering into a civil settlement does not affect criminal liability because the civil and criminal justice systems are separate.
While not necessary, it is still worthwhile to confirm that this ban on enforceability is explicitly preserved in the agreement’s language. You should also confirm whether your agreement will prevent you from reporting abuse to any relevant licensing boards or oversight agencies, and whether the confidentiality clause applies to both parties or just you.
Is a Sexual Abuse Settlement Taxable?
The facts and circumstances surrounding each settlement payment must be considered to determine whether it is taxable, as not all settlements are exempt from tax.
Generally, IRS guidelines state that compensatory damages for personal physical injuries are tax-free. Damages for non-physical injuries like emotional distress and psychological trauma are tax-free if they are directly tied to a documented physical injury or assault, or if they cover medical care. Otherwise, they may be taxable.
Punitive damages are generally taxable except in wrongful death cases.
How your settlement agreement is worded can affect the tax treatment of the proceeds. The agreement should clearly allocate the proceeds to the specific types of damages. Confirm with your attorney whether any portion of your settlement is taxable.
Are There Liens or Reimbursement Obligations?
Outstanding liens or crime victim reimbursement can affect how much you may receive from a sexual assault or abuse settlement. The federal Department of Justice’s Office for Victims of Crime provides crime victim compensation programs to reimburse victims for medical costs, mental health counseling, lost income, and other crime-related expenses.
Unresolved liens, such as medical provider or health insurance liens, can reduce what a survivor actually keeps from a settlement fund. These liens may be placed by a provider, insurer, or other party to ensure payment from settlement funds for services related to the case, such as healthcare expenses.
In addition, you generally must pay the attorney’s fees from the settlement. If the attorney worked on a contingency fee basis, they will deduct their pre-agreed rate and any litigation costs from the settlement before distributing the proceeds to you.
Does a Settlement Involving a Minor Require Court Approval?
If the survivor is a minor, you may have to seek court approval through a process called “minor’s compromise” before a settlement can be finalized. This formal court approval process is required in many states to settle a personal injury claim or lawsuit on behalf of a child under 18.
The requirements for a minor’s compromise vary by state, so confirm with your attorney to see whether it applies to your settlement.
