Your lawyer has a heightened duty of care and candor after forming an attorney-client relationship. This video explains everything you need to know.
Working with an experienced personal injury attorney increases your chances of recovering compensation for your loss. When injured victims receive a settlement for their personal injury claims, they also receive a copy of the settlement check.
The sum of all of the checks should total the final settlement amount, if not you may have grounds for bringing a claim against your lawyer for malpractice.
Agreeing on a settlement amount with the insurance company is part of the personal injury lawsuit or claim process. However, once there is mutual agreement on the settlement amount between your attorney and the defense attorney, you must go through a settlement check process.
Your attorney will help you handle most of the process and the legal obligations after the insurer issue the personal injury settlement check.
Once you are awarded a settlement for your personal injury case, you will need to decide how you want to receive it, either a lump sum payment or a structured settlement.
The insurance company will issue your check within 30 days of the settlement agreement. The check would be in your and your attorney’s or law firm’s names.
Unless you have given your attorney a Power of Attorney to deposit the check into your account on your behalf, you will need to endorse the check first.
The law firm will deposit the settlement funds into their escrow account, which is an account that the lawyer must maintain to keep client funds separate from their own.
Before the attorney can distribute settlement proceeds, the check must first clear into the escrow account.
If your health insurance provider has paid for your medical treatment, you cannot keep all the settlement money.
Your insurer will have priority over your settlement check for unpaid medical bills and the amount they paid to cover your medical expenses. If there is a lien, your attorney will review medical records and verify the lien before processing the health insurer their due payment.
Besides paying the insurance company for the medical bills they covered for you, your attorney will have to pay other fees, including court fees and payment to witnesses, if any.
Most attorneys work on a contingency fee basis, meaning they don’t take any upfront payment unless they successfully fight your personal injury claim resulting in a settlement check.
Before signing a contract with your attorney, they would’ve mentioned the terms and conditions they will be working on, including the percentage they would receive from your settlement amount as part of attorney’s fees.
After deducting the attorney’s fee, you will receive a final check for the remaining balance.
In personal injury cases where there are large settlements, the insurance company may request to process that payout through an annuity, allowing them to spread the payments to the plaintiffs over a period of time.
If that happens, the first check will go to the attorney, who will settle all medical bills and expenses, including legal fees.
Once the final accounting is complete, the plaintiff has no other obligations and will be in an arrangement with the insurer, who will make direct payments until they cover the entire settlement amount.
Your attorney or law firm will provide you with a settlement check copy and the final accounting. If they don’t, you may have a cause for legal action against the firm as they have been hired to look out for your best interest, and handling the money is part of it.
Physical injury awards are usually nontaxable, even if the settlement check covers lost wages, pain and suffering, and other damages. However, the only exception is punitive damages, which are taxable.
You will only receive punitive damage if the case goes to court and the judge awards it, not in a settlement check.
If you suffered injuries in an accident that was not your fault, contact us at (833) LETS-SUE for a free consultation, as you may qualify for a settlement.
Our experienced personal injury lawyer works with complete transparency, ensuring you remain updated throughout the claims and personal injury settlement process.
Here are some additional answers to frequently asked questions: