About 95 percent of personal injury matters end through settlement. It is a process through which the insurance firm representing the at-fault party consents to pay you a given sum.
Accepting the offer will erase your right to litigate the issue. The sum the insurance company pays is the “settlement.”
The insurance firm often sends the settlement check to the victim’s attorney or law firm to cash it. This process may confuse plaintiffs, who may be dismayed that their attorney has taken their settlement.
This piece aims to correct this typical misconception and enlighten personal injury plaintiffs on cashing settlement checks.
“My Attorney Took My Settlement”: A Typical Misconception After Resolving an Injury Claim
After consenting to a settlement and signing every form, the insurer will send the settlement check to your lawyer. Many personal injury plaintiffs worry that this means their lawyer has taken their settlement.
However, the lawyer cannot cash the check and deposit the money in their private or personal account; they will instead deposit it in an escrow or trust account. Personal injury law mandates that funds from settlement checks be in this unique account until the completion of some steps. The concerned persons must give a full account of the money and fairly share it with all parties.
Dissecting What Happens to a Settlement Check
When your law firm or lawyer gets a settlement check, they will keep it in a trust or escrow account. The attorney will not mix the money with their business or personal funds. If there are issues with the check, the lawyer will inform the court and at-fault party for a quick resolution.
Your lawyer will take the following steps after depositing the money in the trust account:
Your Lawyer Repays Those With Claims on the Funds
If you received damages for medical care and your health insurer shouldered the treatment, the insurer may be entitled to a claim. Also, if you received a lawsuit loan, the provider is eligible for a claim.
Your attorney must settle these individuals and entities before disbursing the remaining funds.
Your Lawyer Receives Case Expenses and Legal Fees
If you agreed to pay your lawyer contingently, they will deduct the pre-agreed percentage from the recovered settlement before handing over the money to you. Similarly, they may be eligible to deduct the expenses they used in prosecuting the case, such as investigators’ charges.
Receiving the Balance
You will get the settlement check balance after your attorney deducts all fees and expenses. Whatever you receive entirely belongs to you.
The Duration It Takes to Receive Your Settlement Funds
Personal injury plaintiffs often get their share of the funds within a few weeks after the defendant’s insurer sends the settlement check.
However, the process could elongate if you have the following issues:
- Wrongly-signed release forms
- An estate or a minor is a party to the funds
- Your lawyer is discussing debt repayment to lienholders with a claim on the funds if they believe the amount is wrong or unjustifiable
- The bank delays in clearing the settlement check
“Your lawyer should constantly communicate with you and let you know the timeline for getting your settlement,” says attorney Jon D. Berman of Berman & Russo.
Can Your Attorney Take Your Settlement Check?
The simple answer: “No.” After clearing liens and satisfying all debts, the money legally belongs to you. So, after cashing the settlement check and disbursing it to claimants, your attorney will hand over your share to you immediately.
It is a breach of the law and unethical for a lawyer to divert the settlement funds, even tentatively. There could be severe consequences for such a misuse. For instance, infamous lawyer Michel Avenatti got 14 years of imprisonment for stealing a client’s settlement funds and for hiding the settlement terms.
There are strict laws against legal professionals taking or borrowing settlement funds. Though your lawyer can recover expenses and remove the legal fees you pre-agreed to from the settlement funds, you should be aware of these fees beforehand. You must know the whereabouts of your settlement proceeds when your attorney shares them with claimants.
Conclusion
Engaging a reputable local personal injury lawyer will decisively address the fear of mismanaging your settlement funds. They will have explicitly explained things to you from the outset so you will know the percentage that will accrue to you from the settlement.
That is why settling for a trusted attorney with a track record of success in similar cases is advisable. They will help you with the best possible result and quickly disburse your money.
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