The process of pursuing a personal injury claim or lawsuit can be a long one. There are a number of steps that must take place before funds can be disbursed.

The process of pursuing a personal injury claim or lawsuit can be a long one. Settling the case before going to trial can be a very exciting step, however, it’s important to remember that it’s not the end. It’s not a simple payment of money, but the ending of a legal obligation. There are a number of steps that must take place before any of the funds can be disbursed.

THE CASE IS SETTLED. The first step in the disbursement process is having both sides agree upon terms to resolve the lawsuit. Once both sides agree, a settlement agreement is drafted. These agreements outline the timeframe and amount that has to be paid. Generally, there are two main types of payment: a lump sum or a payment plan. If the agreement states the money will be paid in a lump sum, the defendant (or the defendant's insurance company) will normally have 30 or 60 days to pay the money. If both sides agree to a payment plan, the timeframe will be outlined in the settlement agreement. Once both sides have signed the agreement, the lawsuit is typically dismissed.

RECONCILING THE BOOKS. Once the final agreement has been signed and the plaintiff's lawyer has received the settlement funds, the process of disbursement can begin. The funds are placed into a trust account so that all costs, fees, and liens can be paid. Normally it takes a few days to a week (depending on the size of the check) for the check to clear the bank and be available in the trust account. Once the funds become available, the following steps happen:

* Attorney’s Fees. The first expense that is deducted is the attorney’s fees. They are a percentage of the total amount recovered. It is important to remember that the attorney’s fees are deducted before any other expenses are taken out of the settlement including bills, liens, expert fees, etc. This process is generally explained in the engagement agreement and the initial signup meeting.

* Case Expenses. When the lawyer agreed to take the case on a contingency fee basis, they probably agreed to advance any expenses or costs that may be incurred while pursuing the case and then be reimbursed if they were successful in getting compensation for the client. Any case expenses will be paid back to the lawyer from the remaining settlement funds (not from the attorney’s fees). These may include ordering medical bills, hiring an expert, court fees, paying for a deposition, or any travel expenses.

* Any Known Medical Bills or Liens. The lawyer will pay any bills or liens that they are aware of from the settlement funds before disbursing any money to the client. These may come from Medicare, Medicaid, an insurance company or a medical provider. It is always best practice to give any invoices or notices of liens that you receive to your lawyer as soon as you receive them. Normally, the lawyer will try to negotiate with the insurance companies to get the bills or liens lowered and this process can take some time. Providing any bills or liens as soon as you receive them can help expedite the process.

* The Remaining Money is Given to the Client. After all the expenses, fees, and liens have been paid, the client will receive the remaining settlement funds. Typically, a settlement statement will be prepared and signed before the money is disbursed.

VARIABLES THAT MAY AFFECT THE PROCESS OR TIMEFRAME. While the above is the general process for disbursing settlement funds, there are a few things that may affect how quickly the final settlement check may be disbursed. Some of the most common variables that may affect the process and timeframe are:

* If the Lawsuit Involves a Minor. Settlements involving minors are handled differently than those for adults. For example, settlement funds may put into a Trust or be used to purchase an annuity that will invest the money until the minor reaches a certain age, and then pay benefits when the child becomes an adult.

* Lien Finalization. If there is a lien from Medicare or Medicaid or a PIP insurer, it must be satisfied before any of the funds can be dispersed. Sometimes it can take Medicare or Medicaid or the PIP insurance company some time to finalize the lien amount. While the lawyer can follow up on the lien finalization, it is something that is ultimately out of their hands.

* Defendant is Slow to Pay. If there are logistical difficulties on the defendant’s end on processing the payment, that can slow down the process. For example, if the check is not able to be deposited and has to be reissued, this will slow down the process.

* Probate Issues. In cases where an injured client has died, the probate process must be completed prior to the disbursement of the settlement. The probate process has a lot of different steps and each and every one has to be completed before any money from the settlement can be disbursed.

It is important to remember that every case is different. While there is a general process for disbursement that most personal injury claims or lawsuits will follow, the exact process will differ for each case. However, having an understanding of the general disbursement process can help manage expectations for when the final funds will be disbursed.

If you or a friend or family member has been injured in an auto collision and need legal representation, give us a call at 253.858.5434 and set up an appointment for a free initial consultation today.