Over 95 percent of personal injury claims end through settlement. The at-fault party, through their insurer, agrees to pay a given sum. Accepting it means forfeiting your rights to sue. The money the insurance firm pays is known as a “settlement.”
The insurance company will send the settlement check to your personal injury attorney or law firm for them to cash. This may be a source of concern to plaintiffs, as some of them argue that their attorney takes their settlement.
Before proceeding, it is essential to state that your attorney cannot take your settlement. This article explains what transpires between when your lawyer receives the settlement from the defendant’s insurer and when they disburse it to you.
Flying Out of the Typical Misconception
After you consent to a settlement and sign every form, the defendant’s insurer will send the check to your lawyer. At this stage, you may begin to feel agitated or panicked, but there is no cause for alarm.
The law does not empower your lawyer to cash the check and keep the funds in their personal account. The ideal destination for the funds is an escrow or trust account.
“The law specifically mandates attorneys to keep settlement funds in this account until after completing some steps. The steps include comprehensive accounting of the money and sharing the funds to those with claims on it,” says personal injury attorney Matthew Shaffer of Schechter, Shaffer & Harris, LLP – Accident & Injury Attorneys.
Steps to Handling a Settlement Check
Your lawyer will safely hold any settlement check in an escrow or trust account after receiving it from a defendant’s insurance company. They keep it in this account to ensure it does not mingle with their business or personal funds. The lawyer will inform the court and defendant about an un-cleared check for quick resolution.
The following will happen after depositing the settlement check:
Repayment of People with Claims on the Money: Your lawyer will repay those with claims on the funds. For instance, if you got damages for medical care and your health insurer shouldered the bills, your insurer may be eligible for a claim. Also, a loan provider will have a claim if you take out a lawsuit loan. The law mandates that you must first settle these individuals and organizations.
Collection of Legal Fees and Expenses: If your lawyer prosecuted the case contingently, they will deduct the agreed percentage after receiving the settlement. Depending on your agreement, they may pay the case expenses, like the investigators’ fees.
Receiving the Remainder of the Funds: Your lawyer will send you the settlement balance after clearing debts and expenses.
The Duration It Takes to Receive Your Settlement Funds
Expect your share of the settlement funds a few weeks after the defendant’s insurer sends it. However, the following issues could elongate the process:
- Wrongly-assented release forms
- Delay from the bank in clearing the check
- An estate or a minor is a party to the process
- Your lawyer is discussing debt repayment with lien holders with a claim on the funds if your legal team believes the sum is incorrect or unjustifiable
However, despite these impediments, a reputable personal injury lawyer will constantly update you on when you will receive your share of the settlement funds.
The Crux: Can Your Attorney Take Your Settlement Check?
Though the law empowers your attorney to cash your settlement check and disburse it appropriately, they cannot take the funds arbitrarily from you. After clearing liens and debts, the funds are legally yours.
A lawyer cannot tentatively or permanently mismanage the funds, as it would violate the law and their ethical standards. The implications of this unprofessionalism are severe. For instance, Michel Avenatti received 14 years of jail time for stealing a client’s settlement funds and concealing the settlement terms from the client.
Hence, you will hardly find yourself in this fix due to the strict laws against lawyers taking or borrowing settlement money. So, relax and disconnect yourself from impatient plaintiffs who hastily accuse their attorneys of taking their settlement funds.
It is ideal for your lawyer to deduct their fees and case expenses you consented to pay from the settlement. However, they should inform you of every fee when they agree to represent you. Similarly, they should provide a detailed record of how they distribute the settlement funds after the case to promote accountability and trust.
Conclusion
Engaging a trusted and reputable local personal injury attorney will settle your fears. When they receive the settlement check, they will disburse it transparently and carry you along. Settle for a personal injury attorney who is passionate and enthusiastic about your case for the desired outcome.
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