Consent decree
Definition
A court-approved settlement in which a company or individual agrees to stop certain conduct and accept ongoing judicial oversight, without admitting guilt or liability. Once a judge signs it, violating the decree is contempt of court, not just a broken contract.
Why it matters
Consent decrees let regulators secure binding, court-enforceable changes in corporate behavior faster than a full trial. But because they typically include no admission of wrongdoing, companies can settle serious allegations, antitrust violations, discrimination, environmental harm, without the reputational or legal exposure of a guilty finding, which weakens deterrence.
Seen in the wild
Consent decrees are a routine tool of Justice Department and SEC enforcement in antitrust and securities cases. For example, the department's Environment and Natural Resources Division regularly resolves Clean Water Act and Clean Air Act violations through negotiated consent decrees requiring companies to fund remediation and monitoring without a formal admission of guilt.1