What is the Settlement Check Process?

When you receive a favorable decision regarding a personal injury claim, you expect your settlement check to arrive in a timely manner. Unfortunately, far too many settlement checks take far too long to direct deposit in a checking account or to arrive at the mailing address provided by the plaintiff. The result is you fall further behind on medical bills that have piled up since the incident.

At Morgan & Morgan, we understand the frustration that develops because of a delayed settlement check. When our clients remain out of work because of a personal injury, a delayed settlement check becomes even more of a financial burden.

Whether your personal injury claim involves a defective product, a motor vehicle accident, or an incident of medical malpractice, Morgan & Morgan provides you with the legal support you need to recover the money that you deserve. We also help our clients track checks to ensure they get paid soon after a settlement is reached with the defendant.

If you’ve been waiting, left in the dark, or your settlement check is simply nowhere to be found, schedule a free case evaluation with Morgan & Morgan today to learn more about the processing of your settlement check.

What Is a Legal Settlement?

According to data released by the Bureau of Justice Statistics, just four percent of personal injury cases reach the trial phase of the resolution process. The vast majority of personal injury cases settle outside of a courtroom. Both parties reach an agreement that is worked out between the attorneys representing each party.

A settlement represents a formal legal agreement that officially ends a dispute, as well as results in the dismissal of the case in the civil court system. Settlements happen before a plaintiff files a lawsuit, but the most common settlement happens after a plaintiff has filed the paperwork that initiates a civil trial. Because civil trials can be costly and time-consuming, most personal injury cases never see the light of a courtroom.

When Is a Check Issued After a Legal Settlement?

As part of a settlement agreement, the defendant is legally liable to compensate the plaintiff for the costs associated with a personal injury incident. Although the plaintiff agrees to compensate the defendant, it takes negotiations to bridge the gap between the legal issue of fault and the amount of compensation the plaintiff should receive.

Each party has to consider the advantages and disadvantages of settling a personal injury claim. One of the biggest advantages is settling a personal injury claim avoids the unpredictable nature of a civil trial. Legal settlements also allow both parties to resolve the claim much faster than if it went to litigation. One important thing for our clients to remember: The judicial system does not consider a legal settlement to be final until the plaintiff’s lawyer receives the check and the check clears the insurance company’s bank.

This is when frustration sets in for many of our clients. They expect to get paid on the day when the legal team from Morgan & Morgan reaches a legal settlement with the defendant’s lawyers. Several factors can play a role in delaying the sending of a settlement check.

First, the defendant might not have the money to compensate the plaintiff. When this happens, a personal injury attorney who represents a plaintiff might try to reach an agreement that includes a payment plan. Second, the paperwork that processes the settlement check might get lost in the system. Although technology has reduced the number of missing documents in the judicial system, the fact remains the paperwork that approves settlement checks still gets lost.

Then, we have the logjam called government bureaucracy. With thousands of settlement checks getting processed each year, the system can become overwhelmed and start to delay the distribution of settlement checks.

Morgan & Morgan ensures our clients promptly receive their settlement checks. We do not stop working for you on the day when we reach a settlement with the defendant. Our work is done on the day that you receive just compensation for your injuries.

What Is the Order of Settlement?

When both parties reach a settlement, both the plaintiff’s and defendant’s lawyers report the settlement to an officer of the court. The court then issues an Order of Settlement, which requires the plaintiff and the defendant to complete and submit the proper paperwork within 30 or 60 days. We see that we have a delay in the settlement check process that can reach as high as 60 days.

The most important document is the release form that absolves the defendant of future liability for the same claim. Legal representation for the defendant prepares the release form, which should describe the terms and conditions of the settlement. The release form can be short or long depending on the complexity of the case and the terms and conditions agreed to in the settlement.

Most release forms cover three essential legal points:

•       Release of defendant and defendant’s insurance company of future liability
•       Defendant and defendant’s insurance company does not admit fault
•       Defendant and defendant’s insurance company are released from the claim

What Is the Process for a Defendant’s Insurance Company to Issue a Check

The defendant’s insurance company typically pays the settlement, which should go out to the plaintiff as soon as the insurance company receives the release form. However, delays can occur because the at-fault party’s insurance company experiences internal processing issues.

Some states have established deadlines for when a defendant must send a settlement check after receiving a release form. A few states have enacted laws that add interest to a settlement amount starting on the day when the defendant’s insurance company received the release form. The addition of interest to a settlement check is supposed to act as a motivator for the defendant’s insurance company to send out the settlement check promptly.

In most personal injury cases that involve a settlement check, the defendant’s insurance company writes a check to your attorney. Your lawyer receives the check and then deducts the percentage of money agreed upon before sending you the balance in the form of another check.

What Happens When the Settlement Check Arrives at Your Lawyer’s Office?

After the settlement check from the insurance company arrives at your lawyer’s office, your personal injury attorney places the funds into an escrow account. Putting the settlement check funds into an escrow account ensures the insurance company has enough money in its account to cover the settlement check. When the settlement check clears, your lawyer can then begin to distribute money out of the escrow account.

Your lawyer has to pay off outstanding liens, which are the debts you might owe that are related to your personal injury claim. If your attorney fails to take care of your outstanding liens, the creditors holding the liens can initiate a civil lawsuit against you. Your lawyer also receives the contingency fee that you both agreed to before filing the personal injury claim.

What Is Just Compensation?

You will hear a lot about the term “just compensation.” What exactly does that mean?

In short, just compensation represents the full amount of money that you deserve for suffering from an injury. An experienced personal injury attorney can help you place a value on what you deserve for just compensation.

Here are a few factors to consider for just compensation before agreeing to a settlement of your personal injury claim:

•       Medical expenses
•       Duration of medical treatment
•       Lost wages because of inability to work
•       Rehabilitation costs, including support devices
•       Long-term prognosis
•       Pain and suffering

A long-term prognosis allows your lawyer to calculate future costs, such as medical bills and daily living expenses. You should receive a prognosis from a neutral physician who does not have a vested interest in your personal injury claim. Unlike medical bills and lost wages, pain and suffering is not easy to quantify. Mental and emotional distress typically form the basis for pain and suffering compensation. Your personal injury attorney can walk you through the process for receiving a professional prognosis of your mental and emotional state.

What Are the Possible Delays in Receiving a Settlement Check?

We already mentioned a delay in the submission of the proper paperwork, which can be as long as 60 days depending on the state where you live. What are the other potential issues that could delay the reception of your settlement check?

•       The claim involves an estate
•       The claim involves a minor
•       The improper signing of a release agreement
•       The insurance company processing the claim operates in a different state than the insurance company that issues the check
•       Dispute regarding the release form
•       Your lawyer has to negotiate the amount of one or more liens
•       Clerical error(s)
•       The claims adjuster did not forward your documents for approval

How Do I Expedite the Settlement Check Process?

Sixty days is a long time to wait for money that you need to pay medical bills and have enough over for daily living expenses. How long it takes for you to receive a settlement check depends on several factors that include the type of personal injury case and the type of insurance policy held by the defendant.

The most effective way to speed up the settlement check process involves hiring an experienced personal injury lawyer.

Your attorney expedites the process by preparing and submitting the proper documents for processing. An experienced lawyer carefully reviews every document to prevent delays. One missing signature can delay your just compensation for a couple of weeks. Legal counsel also thoroughly explains how the impact of liens can slow down the processing of your settlement check

How Do I Track My Settlement Check?

Hiring a personal injury attorney helps you track your settlement check. Since your lawyer receives the check for dispersing funds for liens and the legal contingency fee, your attorney is the one responsible for monitoring the processing of your settlement check. Tracking the status of your settlement check starts by determining how long the defendant’s insurance company has to submit the release form. Your lawyer will contact the defendant’s insurance company to discover whether the company has submitted the proper paperwork.

Suffering an injury that was not your fault can produce life-altering financial consequences. Be proactive by hiring an experienced personal injury attorney to fight for your rights, as well as track your settlement check.

Schedule a free case evaluation with Morgan & Morgan today to learn more about the processing of your settlement check.