When you win a personal injury or wrongful death suit, you'll receive compensation.
Once a truck accident case is settled or won in a jury trial, the compensation you're rewarded will be disbursed. In this article, we're going to explain how that process works.
Where does the money come from?
A trucking company will compensate a victim either by liquidating their own assets, or using money from their insurance policy; which occurs depends on the specifics of the case. However, something important to keep in mind is that a company with a large amount of assets is probably going to have the resources to protect them. With that in mind, the odds are that an insurance company is going to be involved in some capacity.
What must be signed?
In order to officially settle a case, the insurance carrier will make the victim sign a document called a release. This is a document by which the client agrees not to sue them again in relation to the same incident. In short, they're not allowed to keep going back to the well.
Additionally, the client will sign a disbursement provided by the law firm. This is a very useful tool for the client because it shows exactly how much money everyone is walking away with. It keeps everything transparent and aboveboard, so you always know who received what, and that no one received an unfair proportion.
In some instances, a client will sign a statement of acknowledgment, whereby they acknowledge that the case is closed and that the law firm will not be pursuing anything further on their behalf. However, in other cases, suing a trucking company is only phase one, and after the lawsuit has concluded there are other steps to take. In those cases, an acknowledgment would not be signed until the entire matter had been brought to a close. If a lawsuit has been filed, but the matter is subsequently settled, then the client may need to sign a document asking the court to dismiss the case.
Naturally, if the case goes to trial and there is no settlement, you may never have to sign a release. This is because the jury decides how much you get, not you.
Who gets paid?
Grossman Law Offices works on a contingency fee basis. This means we only get paid if you win. Our fee is proportionate to what's recovered, while the rest goes to the client. This amount is typically one-third of the monies recovered. In some cases, the client will owe money to other parties. For instance, they may have outstanding medical bills related to the accident. Under these circumstances, our firm has a fiduciary duty to make sure these debts are paid, and we'll take steps to make sure they're addressed. Typically, however, whenever money is owed to a third party such as a medical provider, we're in a position to negotiate that money down on the client's behalf, which means more money for them.
How is the money transferred?
In all matters in which they represent clients and settle cases, lawyers are required to follow strict ethical guidelines. One of these guidelines requires that lawyers not mingle law firm funds with those of a client. For example, imagine that you hire a plumber. You pay him $1,000 to do some work. He deposits that money into his bank account, which currently has a balance of $10,000. The $10,000 was made up of some of his money, as well as some paid to him by other customers. There's nothing wrong with this. The plumber can manage his banking however he pleases.
However, if a lawyer were to run his firm's accounting the same way, he would likely be disbarred. Why is this? Because lawyers handle such sensitive matters, often involving large sums of money, the cleanest way to avoid accounting errors or questionable practices is simply to segregate client funds from the attorney's own money. What's more, it is widely regarded as unethical for lawyers to earn interest on client money that is deposited into an account that is controlled by the lawyer. Think about that for a second. If there's a case from which a client is hoping -- sometimes depending -- on receiving money, but his lawyer is earning interest on it, it gives the lawyer an incentive to stall in order to continue earning interest. This is obviously bad.
To avoid this, there's a special kind of account called an IOLTA account. This is an account set up for lawyers in which interest earned goes to fund legal services meant for the poor. The other important characteristic of these accounts is that they're often one-time-use accounts. When we settle a case, for example, the defendants will write a check or create a draft for the settlement value. The draft is then deposited into the account, and we're able to write a check to the client for the client's portion, and a check to the law firm for the law firm's portion. Once that's done, the account is closed and never used again.
Tax Liabilities
We're not tax lawyers so you should seek out the advice of a tax lawyer or an accountant anytime you receive a large amount of money. However, settlement proceeds are generally not taxed.
Annuities and Other Investment Vehicles
If a client is of sound mind, they're able to do whatever they wish with their money. However, most attorneys will recommend that the client place the money into a secure or low-risk investment, such as an annuity. We have no personal stake in how a client handles their finances, but when someone falls into a lump sum of money, as can be the case when a truck accident is settled, it's smart to make the money work for you. At the very least, victims should be cautious. There are people out there who monitor the court, and attempt to scam those who suddenly find themselves with a large sum of money.
Children and the Mentally Disabled
Often, large settlements are recovered for children, adults who have suffered brain injuries, and other people who are unable to make financial decisions for themselves, or whose assets need additional protection. Under these circumstances, the court will appoint a special lawyer called a "guardian ad litem." The ad litem's job is to make sure that none of the lawyers involved, relatives of the individual the assets belong to, the insurance carrier, or anyone else involved, do anything that's unfair to the client. Typically, the ad litem will recommend that some or all of the money is put into a trust until the client reaches adulthood or is mentally competent to handle the funds.
Related Articles for Further Reading:
- How Trucking Companies Fight Back
- Trucking Companies Try to Lower a Jury's Opinion of a Case by Portraying Victims as Dysfunctional
- What Determines the Value of My Truck Accident Case?
