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How a Plaintiff Gets Paid After a Personal Injury Settlement

The goal of a personal injury lawsuit is to provide the plaintiff with the means to cover expenses associated with the injury as well as compensation for the negative consequences of the injury in the person’s daily life. Plaintiffs often assume that at the end of a successful lawsuit they’ll be handed a check. Although in most successful cases a defendant does make a payment as part of resolving the dispute, the mechanics behind the payment process are usually more complicated. Personal injury lawsuits can resolve in the plaintiff’s favor in two ways: either as a negotiated settlement, or by a final judgment of a trial court. Most cases end in settlements, for a variety of reasons. Settlements provide both sides the opportunity to control how the plaintiff will be compensated. If the case goes to trial, the judge and jury take control of many aspects of the process.

Who, exactly, gets paid after a personal injury lawsuit?

Although the injured plaintiff is right to feel entitled to receiving money from the defendant who is responsible for his or her injury, the plaintiff is often not the only party who expects to be paid out of a settlement or judgment award. It’s common for plaintiffs to be one of several parties that have claims to the defendant’s payment:
  • The plaintiff’s insurer (or insurers) may have the right of subrogation, which means that it is entitled to be reimbursed for its expenses related to the injury out of the settlement or judgment. If the plaintiff has been covered by Medicare, it will need to be reimbursed before anyone else can receive money from the award.
  • Providers of medical care who have not otherwise been paid for their services may have issued liens that must be satisfied.
  • If the plaintiff’s law firm has handled the case on contingency, it will take the portion of the judgment award to which it is entitled to cover its expenses and pay its staff for the time they have put in on the case. The amount the firm is owed will have been set out in the firm’s engagement letter with the client, and should have been explained orally as well.

Alternative forms of payment

In settlement negotiations the plaintiff and defendant may choose between a number of approaches for facilitating the payment of the settlement amount to the plaintiff and others who are entitled to a share. In cases involving large sums, a structured settlement can be a superior approach both for the defendant who is faced with a significant financial burden and the plaintiff who can receive a variety of benefits. In a structured settlement the defendant purchases an annuity, with the plaintiff as beneficiary. The annuity pays the plaintiff at regular intervals over a specified period of time. The plaintiff often gets tax benefits from this approach, and the defendant’s overall costs may be lower. Even if the defendant will pay a lump sum, the sum typically gets placed into a special account that is used to pay off other expenses before finally being distributed to the plaintiff. Management of this account is often handled by the plaintiff’s attorneys and can be subject to court oversight. The goal is always to get a payment to the plaintiff as soon as possible. Experienced personal injury attorneys work hard throughout the process to minimize delays at this phase of the case. For over 45 years the law firm of Greenman Goldberg Raby Martinez has represented Las Vegas clients in personal injury cases. Our attorneys are available to provide free consultations. We can be reached at 702-388-4476 or send us a request through our site.