When an accident injures you, the living expenses can add up, especially if you are out of work to recover from your injuries. After months of negotiations, you’re probably relieved to hear of a resolution and ready to apply your settlement to those bills immediately.
While there is a light at the end of the tunnel, there are still a few more steps before you receive your settlement check. Understanding the process can help you keep track of your settlement and know when you can expect your payment to arrive.
What Does It Mean When an Injury Suit Settles?
When you file a lawsuit, your attorney will work with you to establish a solid case to present at trial. They will compile documentation, photographs, witness statements, and expert testimony to prove fault in the accident. With this evidence, they will place a monetary value on the losses you incurred due to the injuries you sustained.
In many cases, insurance companies presented with this evidence will decide to settle out of court to avoid the high legal costs of trial. Sometimes, after the case goes to trial, the insurance company will realize that they benefit from settling out of court rather than spending more on legal expenses.
In either case, the next step is to negotiate a settlement agreement between you and the insurance company. Your injury attorney will have experience creating and reviewing settlement contracts for their clients.
A settlement agreement is a legally binding contract in which one party agrees to pay the other a specific amount to halt a personal injury case litigation. Your attorney will walk you through the settlement process and work to negotiate a fair settlement on your behalf. If you or the other party’s insurance company cannot agree to all payment terms, the case may still go to court. However, most personal injury cases resolve through out-of-court settlements.
What Is the Settlement Process for an Injury Suit?
After an injury settlement, you and the opposing party or their insurance company agree to an amount that will fairly compensate you for your injuries.
Upon reaching an agreement, your attorney and the insurance company will take these steps:
- Order of Settlement: If you reach an agreement out of court, the attorneys involved in the case must inform the court. The court will then issue an Order of Settlement, which requires that both parties complete a settlement agreement and release of liability. Upon receipt of these documents, the court will dismiss the case. If either party fails to complete the required documentation, the case will remain open, and litigation will continue.
- Signing the Settlement Agreement: The primary contract between yourself and the opposing party. The settlement agreement outlines the settlement amount and acknowledges the settlement as a legally binding contract accepted by both parties instead of a judgment. Most settlement agreements include a clause or a separate Release of Liability form that prevents you from seeking any additional compensation from the opposing party for the injury in question.
- Opposing Party and Insurance Company Review: Once you have signed the paperwork, the opposing counsel or insurance company will review the forms to ensure that everything is as agreed. If there are any discrepancies, both parties will address them at this time.
- Cutting the Check: When the paperwork has been completed, signed, and processed with the insurance company, they will cut a check for the agreed amount and submit it to your attorney.
- Check Deposit and Lien Settlements: Your attorney will deposit the check into a trust account on your behalf and use the settlement money to pay your outstanding liens and invoices, including:
- Medical bills
- Child support
- Medicare, Medicaid, or Pennsylvania Department of Human Services (DHS)
- Private health insurance
- Auto insurance
- Legal Fees: Your attorney will pay the firm for your legal fees. Your initial agreement with the attorney outlines these fees. The attorney will typically charge an agreed-to percentage of the total settlement for contingency agreements.
Parts of a Settlement Agreement
Settlement agreements can be complex, with a wide range of clauses and addendums designed to protect both parties from future actions, defamation, or breaches of confidentiality.
Standard components of a settlement agreement include:
- Settlement Terms: This is the central portion of the Settlement Agreement and includes the amount paid in the settlement, the payment terms, and the aspects of litigation affected by the settlement.
- Release of Liability: The opposing parties will usually ask you to sign a Release of Liability that essentially allows both parties to exit the case without either party admitting wrongdoing. The release will list all involved parties and outline the provisions affected by the Release of Liability if the agreement is not comprehensive. Upon signing this release, you will not be able to file any additional claims against the opposing party related to the items listed in the release.
- Confidentiality Agreement: When you reach a settlement agreement in an injury suit, the agreement usually includes a confidentiality clause that prevents you or other individuals involved in the suit from discussing non-public details of the case. This portion may be included in the agreement or added as a separate document.
If you have questions about terms in your settlement agreement, your injury lawyer can walk you through the different clauses and how they affect your lawsuit. You must understand your rights and obligations concerning the settlement so you comply with its terms.
How Much Will I Receive for My Settlement?
Settlement amounts differ widely depending on the type of injury and damage incurred. You can expect a settlement to be anywhere from a couple of thousand dollars for a minor injury up to millions of dollars for long-term or debilitating injuries.
Factors that affect the value of your injury claim include:
- The severity of the injury
- Amount of medical intervention required
- Length of recovery and physical therapy treatments
- Long-term medical assistance
- The time you were out of work
- Inability to return to work
- Reduced mobility
- Reduced quality of life
- Career change or long-term unemployment due to injury
- Medical equipment, prosthetics, and medication
When Can I Expect Payment for My Injury Settlement?
After you settle your injury case, you can generally expect your attorney to receive payment from the insurance company within three to six weeks. This time frame is different for every case and may be greater depending on the payment agreement and your bank’s deposit policies.
Lump-Sum vs. Structured Settlement
If you have agreed to installment payments in a structured settlement, you will receive your settlement payments in equally spaced checks over an agreed time frame. Since you will still be responsible for any outstanding bills, liens, and attorney’s fees, be sure to discuss this type of payment plan with your lawyer. You may be required to set up automatic payments to your lienholders and attorney to pay your bills promptly.
With a lump-sum payment, the settlement process is more straightforward, and you can expect to receive your compensation by check from your attorney, less any outstanding liens or attorney fees. Lump-sum payments go to your attorney via check, who disburses the funds to cover your liens and attorney fees. Once you meet these financial obligations, your attorney will cut a final bill with the remaining amount and send it to you.
Your Bank May Delay Payment
With large lump sum payments, banks will often hold the deposit amount until they verify the payment’s validity. While this is standard procedure for many banks, verification can take up to six days if the check is cut from a different bank. If the settlement check is from the same bank, your deposit should only take a couple of days to clear, since the bank can more easily verify the deposit internally.
If the funds do not go into your account in a reasonable time, contact your attorney. They can reach out to the bank on your behalf to determine the cause of the delay and help resolve any issues so that you can receive your funds sooner rather than later.
What if My Payment Is Delayed?
Although most injury settlement checks arrive approximately six weeks from the settlement date, several other factors can delay your payment. In most cases, your injury attorney will be able to walk you through the process and keep you apprised of the state of your settlement.
Some situations that can delay your payment include:
- Insurance company delay: Sometimes, the insurance company may experience an internal error or delay when completing the forms or cutting your check. There is no set period for the insurance company to pay on your settlement; however, most companies submit settlement checks within three to six weeks.
- Your lawyer is paying liens: If your case is long-lived or very complex, it can take some time for your attorney to review all of your medical bills and other costs and make out checks to the appropriate parties.
- Your lawyer is negotiating liens: In some cases, your attorney may question invoices on your behalf before they submit payment. If you need to expedite your settlement check, discuss a split payment with your attorney. They may be able to cut a check for a portion of your payment while withholding a certain amount for bills and fees. Once everything is paid, they can send any remaining amount to you in a second check.
- The mail is delayed: If your attorney is mailing the check, you may experience postal delays. While local mail tends to get to you within a few days, long delays are not unheard of, especially during the holidays or poor weather. If you think your check was lost in the mail, contact the post office and your attorney to find a resolution. If the post office cannot locate the check within a reasonable period, you may need to ask your attorney to cancel it and issue a new one.
Contact your lawyer if you believe that your check is unduly delayed.