The manner in which personal injury settlements get paid out will depend on your fee arrangement with your attorney.
Personal injury settlements are usually paid out by insurance companies. Rarely will the defendant actually write the settlement check, since it’s often a considerable amount of money that most individuals don’t have. And even wealthy defendants, such as corporations, are likely to have some insurance coverage to pay the settlement amount.
The Basic Pay Out Process
When the parties to a lawsuit agree to settle, two general things happen to end the case. First, you as the plaintiff will want the money the defendant promised to pay. Second, the defendant will want you to sign a document (usually called a Release) that ends the litigation. As the name implies, the Release will release the defendant (and his or her insurance company) from any further liability stemming from the facts surrounding your personal injury lawsuit.
Most of the time, only after you have signed the Release will the defendant or the defendant’s insurance company writes the settlement check. Depending on how complicated your case is and the involvement of any other parties, it will usually take a few weeks after you sign the release for you to receive the check.
However, the precise amount of money you receive will depend on your fee arrangement with your attorney. In most personal injury lawsuits, attorneys receive payment on a contingency basis.
How Do Contingency Fees Work?
A contingency fee is a type of fee that depends on a specific outcome. In the context of your lawsuit, your attorney’s fee is contingent on you collecting something from your case, such as when you win at trial or reach a settlement agreement with the defendant.
In a contingency fee arrangement, your attorney receives a certain percentage of your recovery amount. This percentage will usually range between 20% and 40%. The exact percentage will depend on the facts and circumstances surrounding your case, as well as what you were able to negotiate with your attorney. For the most part, the more complex the case or the smaller chance of winning, the higher the contingency fee percentage.
What about Costs?
Even excluding an attorney’s time, litigating a case is expensive. There are court costs, such as filing the complaint to begin the lawsuit. This filing fee is usually several hundred dollars. Then there are litigating costs, such as paying for a deposition (this includes paying the stenographer and obtaining a copy of the deposition transcript) and administrative costs, such as copying and postage fees. Finally, there are the costs associated with paying special witnesses who are knowledgeable about the particular non-legal issues in your case, such as calculating lost wages, the extent of your injuries and who caused the accident.
Find out what you need to know about personal injury settlements by calling our legal team at Wilbanks Law Firm, P.C. at 706-510-0000.