How is a Personal Injury Award Distributed Once the Check is Received?
Finally! You and your attorney have worked together to bring your personal injury case to a conclusion, the check is now in hand, now what? The following general steps are taken to ensure that the settlement proceeds are allocated correctly so as to bring your case to a full and final conclusion.
Step 1:You and your attorney have a fee agreement in place where the attorney agrees to be compensated for his/her work performed at the conclusion of the case. Pursuant to the terms of the fee agreement, the attorney is paid.
Step 2:Pursuant to the fee agreement with your attorney, your attorney may have advanced certain costs to fund the litigation in order to bring it to a conclusion. Examples of those costs would be the cost to obtain medical records, hire experts, take depositions, etc. The funds advanced by your attorney are reimbursed to him/her as part of your contractual obligation.
Step 3:Insurance companies may have paid monies to your medical providers to treat you for your injuries. Now that the case is settled, your insurance company will want to be paid back. This is also known as "subrogation" and is generally a term found in your insurance policy with your insurance company. In essence, the insurance company takes the position that the injuries were caused by someone else, but they'll advance the money for you to be treated, but they want to be paid back in the event of a recovery for your personal injuries. Some medical providers file treatment liens in your case. In the event that happens, certain statutory requirements may be in place pertaining to their priority in being paid back. This priority issue also comes up with Medicare/Medicaid insureds and must be addressed accordingly.
Step4:Distribution to you. After the creditors in your case have been paid, the remaining distribution goes to you.