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How Injury Settlements Are Distributed

Damages compensation is the end goal of personal injury litigation. When a claimant wins in court or through settlement negotiation, a compensation amount is awarded. The injury settlement is then split between paying for medical bills, lawyer fees, case costs, and personal damages.

Medical Bills

Medical bills are generally addressed first when insurance issues a personal injury claim settlement. Some insurance companies may make the payment directly to the hospital and send an additional check to the claimant's lawyer for the balance.

In most cases, however, all the money is sent to the plaintiff's lawyers. The attorney will shoulder the responsibility of dividing up that money and remitting to the hospital what the plaintiff owes. If medical bills are higher and the compensation amount is small, there may be room for negotiating with doctors to reduce the bills.

Legal fees

Next, attorneys subtract their fees from the total amount. A significant percentage of personal injury lawyers work on a contingent contract. A personal injury victim only pays for attorney fees if they win the case. If the lawyer wins the case, attorney fees are usually a percentage of the full compensated amount.

A larger settlement often means that a claimant will pay more in terms of attorney fees. A small settlement generally leads to reduced lawyer fees. These terms will be clearly stated in the contract. It's imperative for personal injury claimants to thoroughly review contract terms and ask about legal fees before hiring a lawyer.

Case costs

If a plaintiff enlists a lawyer for his or her work injury lawsuit, the attorney subtracts the costs of filing the case from the settlement compensation. Case costs are different from attorney fees. These costs are often a summation of court fees when filing the case, costs of photocopying and mailing documents, and expert witness fees, among others.

Case costs are generally incurred by the plaintiff regardless of whether the personal injury case is won or lost. An attorney tracks these expenses and separates them from legal fees. Some lawyers may pay for this upfront, but the amount is deducted from the total compensation after the case.

Personal damages compensation

After paying medical bills and legal fees and costs, the remainder goes toward the claimant's personal compensation. This is the final amount that ends up in the victim's pocket. Following a workplace accident, for instance, the amount can also cater for loss of wages (for the bereaved family) following workplace fatalities.

Further, some attorneys may charge legal fees at a lower percentage than the standard minimum. In that case, the personal injury victim gets more money from the injury settlements.

Settlement distribution can be a lengthy process.

Even after a compensation amount is awarded, there may still be negotiations and computations to be made. Checks may also take time to clear for every payment that is made. This may prolong the time that one gets to have money in their pocket following personal injury litigation. In any case, the lawyer plays an essential role in helping to distribute the settlement.

What happens when the defendant appeals?

The settlement distribution may get stalled if the defendant files an appeal. This sometimes happens for personal injury cases that are won at trial. If, after a trial winning, the defendant appeals, the claimant will have to wait longer. The appellate judge can uphold the win, reverse it, or call for a new trial. There is no room for an appeal if the case ends in settlement negotiation.

Injured victims often work with personal injury attorneys that can help keep things transparent from the start to the end.