Florida Appellate Court Reaffirms Prohibition of "Mary Carter" Agreements

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Conditional settlement agreements between a plaintiff and a codefendant are nothing new. But when such an agreement is premised on the notion that the “settling” codefendant will continue to defend itself at trial, diminishing its own liability proportionately by increasing the liability of the other codefendants, it is against public policy.

The term “Mary Carter agreement” originated in the case Booth v. Mary Carter Paint Co. and evolved through its progeny. It is essentially a contract by which one codefendant secretly agrees with the plaintiff that, if the defendant will proceed to defend itself in court, its own maximum liability will be diminished proportionately by increasing the liability of the other codefendants.

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