Most people prefer to resolve their personal injury claims through settlement rather than trial. There are many reasons for this. Settlement is easier, cheaper, and quicker than trial.
A lot of people don’t realize, however, that even after you reach a settlement and the opposing party writes a settlement check, they will send it to your lawyer. You won’t get any of the money until your lawyer sends it to you.
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Your Attorney’s Client Escrow Account
Once your attorney receives the settlement check from the insurance company, they will deposit it into an escrow account. They must hold these funds in trust until the check clears the bank. Your attorney can disburse the funds only after the check clears.
One reason for a delay in receiving your settlement funds might be the time it takes to deduct certain amounts from your gross recovery. These amounts might include:
- Your legal fees. Your lawyer will almost certainly calculate your legal fees as a contingent fee based on a pre-agreed percentage of your winnings. Typically, this amount adds up to 30% to 40% of your winnings.
- Case expenses. Your lawyer might have racked up out-of-pocket fees relating to your case. There might be court fees, travel expenses, and expert witness fees, to note a few examples. Your lawyer will also deduct these amounts before paying you unless you paid them in advance.
- Medical liens. If your existing health insurance did not cover all of your medical expenses, you might have needed to take out a medical lien to pay them. Under a medical lien, you use your future personal injury compensation as collateral to guarantee the payment of your medical expenses. You pay off the lien when you receive your settlement.
- Subrogation claims: Your lawyer might also have to pay subrogation claims. If your health insurance company paid medical bills for you before the settlement, they may seek reimbursement from your settlement, and your lawyer might need to negotiate the amount of their claim.
It shouldn’t take your lawyer a lot of time to deduct your legal expenses and case expenses. It might take a bit more time to negotiate and pay subrogation expenses and to calculate how much you still owe on your medical lien.
Bank Clearance Delays
If the opposing party issues a check for the settlement amount, it might take your lawyer’s bank time to clear the check. Likewise, if your attorney issues a check for what remains of your settlement after deductions, it might take your bank time to clear the check. In each case, clearance shouldn’t take more than a couple of weeks.
There are at least two special circumstances that might delay receipt of your settlement money by as long as several months.
Complex Settlement Agreements
Just about any settlement will include two components: an agreement by the opposing party to pay you a certain amount and a promise by you to release the opposing party from all future liability surrounding your claim.
In some instances, the parties will agree on the total amount of the settlement and only then begin negotiating the specific language of the release. This will take time. It is perfectly legitimate, but if you don’t understand what is going on, you might underestimate the amount of time you will need to wait for your settlement money.
Settlement Agreements That Require Court Approval
Some settlement agreements require court approval, and obtaining that approval could delay the receipt of your settlement funds. It could be, for example, that you were under 18 at the time of the accident; therefore, you could not pursue your claim on your own.
If your parent or guardian arranged for a settlement on your behalf, a court may have to approve the settlement. Again, this is perfectly legitimate but potentially misleading.
The Rule of Reason
Your lawyer must disburse your settlement funds to you within a “reasonable” time. Typically, this means within 30 to 45 days of the date that you sign the settlement agreement. The “30 to 45 days” figure is just a ballpark estimate. The timing could vary based on the specific facts of your case. Nevertheless, it might make sense to inquire about your funds if you have been waiting more than 30 days since the insurance company should have disbursed the check.
The Problem Might Be With the Insurance Company, Not Your Lawyer
If you are experiencing a delay in receiving your settlement check, it is possible that the insurance company has not yet disbursed a check to your lawyer. Large insurance companies, in particular, have extensive bureaucracies, and you need to give them a bit of time to obtain all the necessary internal approvals.
Nevertheless, Florida insurance law requires the insurance company to make payment available within 20 days after finalizing the settlement. An interest rate of 12% per year will begin to accrue beginning on the 21st day of delay.
If the insurance company is unreasonably delaying payment, you might consider taking steps to enforce your settlement agreement. Once the appropriate parties have signed a settlement agreement, it becomes a legally binding contract.
You can sue the insurance company (or whoever the paying party is) in court on a contract claim. Ultimately, a court can enforce your claim by garnishing the paying party’s bank account.
Taking Action Against Your Attorney
On the off chance that your attorney is unreasonably delaying payment or has misused your funds, you can take the following action against your attorney:
- Threaten to report your attorney to the Florida Bar, and use this threat as leverage to get your money.
- File a misconduct complaint against your attorney with the Florida Bar. The Florida bar can sanction their attorneys in a variety of ways, including disbarment.
- File a lawsuit against your attorney.
Your attorney is probably not intentionally delaying payment or misusing your funds, especially if your settlement funds went into escrow. Nevertheless, it is possible.
Get a Lawyer Involved in Your Miami Personal Injury Case as Early as Possible
A Miami personal injury lawyer might be able to give you a ballpark idea of how much your claim is worth during a free initial consultation at (305) 937-0191. If the amount is worth hiring a lawyer for, you need to know whether it is winnable. Personal injury lawyers don’t get paid unless they win. Accordingly, you can be sure that if a lawyer offers to take your case, they believe they can win it.