Court settlement (retsforlig)
Also known as settlement before the court, in-court settlement, retsforlig, forlig for retten
A court settlement is an agreement between the parties entered into before the court — and it has the same effect as a judgment.
Key facts
- Effect
- Same as a judgment
- Limitation period
- 10 years
In practice
Once a case is before the court, it often ends in a settlement rather than a judgment. The court settlement is an enforceable instrument on a par with the judgment — and it is quicker to reach.
The difference from the voluntary settlement is where it is concluded: the voluntary settlement can be agreed outside the court, long before proceedings are issued. That is why it is so much cheaper.
Where it commonly goes wrong
- Impatience leads to settling too low. A settlement that recovers 40 % of the claim is only a good one if the alternative was less.
- The settlement is drafted without an acceleration clause. Without one you are back in the enforcement court for every missed instalment.
- You settle without including interest and costs. What is not in the settlement cannot be claimed afterwards.