What is a Consent Decree? How Does It Work?
Consent Decree and Consent Judgment Details
They've been around since Medieval times, and they have been used in antitrust cases, civil rights violations, Americans with Disabilities Act (ADA) violations, employment discrimination, and environmental law. But don't assume that consent decrees only affect big businesses or governmental entities. They also can be used in other cases against smaller businesses. In private sector situations, consent decrees are sometimes called consent judgments; they work the same way.
How Does a Consent Decree Work?
A consent decree is an order by a judge that is based on an agreement signed by the two parties. It's a way to come to an agreement that has the force of legal approval instead of having a lengthy and costly trial. The parties also don't have to deal with the uncertainty of the outcome of a trial. Of course, the consent decree can't be given unless the parties can agree.
Consent decrees are binding on both parties because they agreed to it. The decree can't be appealed unless there was fraud (lying) by one party, a mutual mistake, or if the court doesn't have jurisdiction over the case.
These decrees can be brought against government bodies (like the police forces in Chicago and Baltimore listed above) or against businesses, large and small, who violate a law or regulatory code.
Consent decrees are governed by state and federal laws. They are most common when a government entity (local, state, or federal) sues a person or business to make it comply with the law. It can be offered to the defendant to avoid criminal penalties.
The process of a court order can begin in two ways:
- With the parties making an agreement and coming into a court to get the consent decree.
- With a government entity, like a federal agency, presenting the decree as an alternative to a trial.
Some consent decrees come with a time period or a deadline. In the case of the decree for the Baltimore Police, there was a one-year deadline with a timeline for specific plans.
Examples of Consent Decrees
Consent Decrees in Public Situations. USLegal has an example of a consent decree that is written into federal law in cases of violation of ERISA (employee retirement benefits) code. An ERISA violation would be brought against a company that has retirement benefits for its employees.
The language in the regulation spells out the process;
- A specific time period is set for when the parties can postpone a hearing in order "to permit negotiation of a settlement or an agreement." The judge in the case decides how long the parties have to come to an agreement.
- The regulation language spells out what the agreement must contain and when it must be submitted to the administrative law judge.
- The judge has a specific amount of time to review the agreement and make a decision.
- There are also procedures in the regulation that describe what happens if the parties can't come to an agreement.
Consent Judgments in Debt. Bankrate explains another common example of a consent decree or consent judgment in debt situations. In these cases, a debtor (person or business) may be sued for debt with no way to pay. In the agreement, the lender may reduce the amount of the debt. The debtor acknowledges the debt and agrees to fully pay the debt off. Since the judgment is made by a court, the agreement must contain penalties for the debtor if the debt is not fully repaid, including taking away the promise to reduce the amount of the debt.
Consent Decree vs. Consent Agreement
A consent decree and a consent agreement are not the same. In both cases, there is an initial agreement between the parties, but the consent decree is presented to a judge, whose decision is final and enforceable by law. A consent agreement, on the other hand, may not be taken to court. Consent agreements are common in divorce cases. According to LegalZoom, the court can issue a binding divorce decree based on the agreement. Divorce laws are regulated by states.
Consent Agreements vs Mediation or Arbitration Agreements
An agreement in mediation is similar to a consent decree agreement, mostly in when the agreement is taken to court. In mediation, the parties work with a trained mediator to try to resolve their dispute. if they can reach an agreement and put it in writing, the agreement may be filed with a court immediately. The agreement may also be formalized as a contract, which can be taken to court if there is a dispute.
The arbitration process is a separate private process that is directed by an arbitrator, who hears the case and makes a decision. In non-binding arbitration, the decision of the arbitrator is final, but there may be some room for appeal, depending on the language of the agreement. if the arbitration is termed "binding," the decision of the arbitrator is enforceable under law.
Consent Judgment vs. Confession of Judgment
A confession of judgment is a clause in a business loan document that allows the lender to recover the amount of the loan (and more) if they can convince a court that the loan is past due. It's not the same thing as a consent judgment or consent decree.