How Is A Settlement Paid Out From a Personal Injury Lawsuit?

Apr 12, 2021

Not All Money From a Personal Injury Lawsuit Goes To The Personal Injury Victim

Colorado Springs residents who have settled their personal injury lawsuit usually have only 2 questions, when is my settlement paid out, and how much will I be getting? After all, it can be a long and frustrating journey between the date of your accident and the date money winds up in your pocket, and you want your settlement paid out as quickly as possible.

Thus, it is important for you to understand the process of how and when you will get your settlement and how much money you will receive when your settlement is paid out. This last point is of particular note. That is because your settlement amount will not be the same as the amount of compensation that makes its way to your bank account.

What is a Personal Injury Settlement?

Since over 90 percent of all personal injury suits end in a negotiated settlement rather than a trial and jury verdict, it is important to understand what a settlement actually is.

A settlement is an agreement between the plaintiff (the injury victim) and the defendant (the party responsible for the accident and injury) in which the defendant pays an agreed-upon amount to the plaintiff in exchange for dismissing the lawsuit. But in most Colorado injury cases, particularly in car accident lawsuits, it isn’t the defendant who will pay the settlement. That money will come from the defendant’s insurance company.

It does not matter if a case settles before the filing of a lawsuit, during a trial, or at any point in between, the check from the insurance company has several stops to make before it makes its way to you. That journey begins with your lawyer.

Attorney’s Fees and Costs

Even before your accident, you probably saw ads from personal injury attorneys that proclaimed something to the effect of “you pay nothing in attorneys fees unless we recover money for you.” This is called a contingency fee arrangement, and it’s the way attorneys earn their fees in almost all personal injury cases. Instead of paying the lawyer by the hour for their work, as is the case when you hire a business lawyer or criminal defense attorney, an injury victim promises to pay the attorney a percentage of any compensation they obtain when the settlement is paid out..

When you hired your Colorado Springs personal injury lawyer, you likely signed a contingency fee agreement in which you agreed that your lawyer would get a specific percentage of the recovery, usually between 25 percent and 33 percent of the total settlement. This percentage may be higher if they obtain compensation through a trial instead of a settlement. Because of this agreement, you will want to make sure that the attorney you hire is tenacious and experienced in dealing with insurance companies’ deceptive tactics.

Your attorney will deduct the agreed-upon percentage from the settlement proceeds as payment for their services in your case. In addition to the fees for their work, your attorney will also subtract any reasonable expenses they incurred pursuing your claim. This includes everything from court filing fees to the cost of obtaining medical records and expert witnesses, and even copies and travel expenses. If your attorney settles your case relatively fast, these expenses should be relatively low. But if your matter goes to trial, the costs can be significant.

Medical Bills and Liens

One of the many reasons to seek compensation after you suffer an injury in an accident is to pay the substantial medical costs you incur from your injury. Since the defendant caused your injuries, the defendant should pay for your medical bills.

Hospitals, doctors, and other healthcare providers who treated you for your injuries will expect to be paid for their services. Knowing that when you seek compensation in a personal injury lawsuit some of the damages you claim are for your medical costs, they will look to your final settlement to cover any outstanding amounts owed for providing your treatment.

This will likely be accomplished by filing a lien in your lawsuit to stake their claim to any settlement or judgment proceeds. The good news is that your attorney can work with these healthcare providers to reduce their bills and thus increase the amount that you wind up with. But the fact remains that, before your settlement is paid out to you, some part of your proceeds will go to those who treated you for your injuries.

Finally, Your Settlement Is Paid Out

After your attorney, your healthcare providers, and any other interested parties (such as the garage that repaired your car – if you seek damages for unpaid car repair costs) receive their proceeds, you will get the remainder of your settlement paid out to you. These proceeds usually are for your non-economic damages like pain and suffering and your past and future lost earnings, among other losses. This payment in the form of a check is often made to you in person by your personal injury lawyer.

King & Beaty: Colorado Springs Personal Injury Lawyers

If you need a personal injury attorney, the experienced Colorado Springs injury attorneys at King & Beaty welcome the opportunity to speak with you about your accident. We have helped countless clients on the Front Range get the compensation they deserve and need to move forward with their lives. And, yes, you pay nothing in attorneys’ unless we recover money for you. Please contact us today to arrange for your free initial consultation.