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.
For a variety of reasons, few personal injury cases ever go to trial in front of a judge and jury. Instead, the parties in the dispute resolve their differences by negotiation. When the litigants settle their dispute, they avoid the big investment of time and financial resources that is required for a full trial. The time element is often crucial: injured plaintiffs need compensation from defendants to pay bills, and defendants often want to end the dispute to avoid piling up legal fees.
Settlement negotiations usually take place after lawsuits are filed
Settlement agreements arise from litigation, which means that the injured plaintiff typically has already filed a civil lawsuit against the defendant. By filing a lawsuit the plaintiff ensures that if the defendant refuses to come to terms, the option of going to trial always exists. Sometimes a lawsuit needs to be filed to ensure that the relevant statute of limitations doesn’t expire while negotiations are ongoing. Other times a lawsuit is necessary just to bring the defendant to the negotiating table.
One consequence of having litigation underway is that the court plays an important role as a kind of referee during the process. Courts strongly encourage cases to settle because it saves court resources for other, potentially more serious cases. But until a case settles the procedures of the court must be followed. Parties can still ask the court to require the other side to do certain things, such as disclose evidence.
The settlement agreement needs to protect the plaintiff’s interests
Negotiating a fair settlement is as much an art as a science. Settlements need to take into account many different components, including:
- The facts of the events that caused the injury.
- The expenses the plaintiff is facing as a consequence of the injury.
- The defendant’s resources (insurance, cash and other liquid assets, anticipated income, and so on).
In a full trial issues like these get evaluated by the fact finder (the judge and/or jury). A settlement takes place without the benefit of this unbiased examination of facts. The parties need to come to grips with disagreements on their own. The calculation of damages is a good example of a subject that can involve difficult negotiation. Should the defendant agree to compensate the plaintiff for more than easily calculated costs, like prior medical bills? Or should the defendant also be put on the hook for less easily quantified amounts, like the plaintiff’s pain, anticipated future costs, and so forth?
The settlement agreement itself is a binding contract, which the court must approve before terminating the litigation. The agreement itself typically provides for a range of things, including:
- The total amount of compensation the defendant agrees to pay, often itemized.
- A payment schedule (especially common if the defendant will pay from his or her personal resources).
- A release of the defendant from liabilities that aren’t otherwise covered.
Negotiating settlements is at the heart of the work personal injury attorneys do. Having experienced representation is essential to getting the most from a negotiation. The attorneys at Greenman Goldberg Raby Martinez have represented injured clients in the Las Vegas area for over 45 years. For a free attorney consultation about your case call us today at 702-388-4476 or send us a request on our contact page.
After suffering a serious injury the first priority is always to seek medical care. Ideally the injured person is insured, so that the insurance company picks up most of the initial costs of emergency care and any costs associated with follow-up treatments. If the injury also leads to a personal injury lawsuit, the insurer typically will demand that it be reimbursed from any settlement or final judgment award in a process called insurance subrogation. The same is true of Medicare, which has unique requirements for recipients who receive covered care for expenses that are later made part of a settlement.
Placing Medicare subrogation in context
Putting aside the jargon for a moment, it’s worthwhile thinking about what a personal injury lawsuit is for. The goal of filing a lawsuit is to recover compensation for all of the various costs associated with the injury, by making the person responsible for the injury also responsible for those costs. Although medical bills tend to be a substantial part of the damages a plaintiff seeks to recover, other costs like lost earnings and noneconomic factors like pain and suffering are also a component. The object of filing a lawsuit is not to give the plaintiff a big financial windfall.
In that light, insurance subrogation makes sense. Essentially the insurer that provides coverage for someone who later files a lawsuit can be thought of as having borne costs that were the defendant’s obligation. The insurer therefore naturally should be reimbursed. It would not be fair to the insurer or the defendant if the plaintiff could walk away with the cash value of medical care that the insurer has already paid for. In technical terms, Medicare is a secondary payer, while the defendant is the primary payer.
How Medicare’s right to reimbursement works
Medicare recipients must comply with a range of important requirements, beginning with the accident itself. By law Medicare is entitled to a lien on any settlement or judgment award paid out in connection with injuries that it covers. What this means in practice is that the injured plaintiff cannot receive any financial compensation until Medicare releases the lien, typically after it has determined that it has been sufficiently reimbursed. Here is a summary of the major components of Medicare’s process:
- Preliminary notice. Notify the Medicare Benefits and Recovery Coordination Contractor (BCRC) of the injury and the facts of the accident that caused it. It’s important to get this notice submitted as soon as possible after the injury, in large part because Medicare can take a long time processing these notices.
- Monitoring by Medicare, and monitoring Medicare. The preliminary notice sent to Medicare will trigger a review of the plaintiff’s file and ongoing monitoring for new costs. Medicare will eventually send what is called a conditional payment letter setting out in detail the charges that Medicare believes are related to the plaintiff’s legal claim. It is the plaintiff’s responsibility to correct any errors in the conditional payment letter, which can happen if the plaintiff is being treated for conditions other than the injury subject to the lawsuit. For example, if the plaintiff suffered a broken leg in a car crash, but later suffers a burn that requires medical care, Medicare may lump the treatment of the leg together with the burn on the assumption that the two were related. The plaintiff needs to get the burn’s costs taken off the list to prevent Medicare from seeking reimbursement for it from the defendant.
- Notice of settlement. Personal injury cases typically reach a settlement without going to trial. Once settlement is reached Medicare must be informed as soon as possible. Medicare is told how much the settlement was for, the amount of attorneys’ fees, and other details.
- Appeals process. Medicare uses the settlement information to compile a final demand letter setting out the amount it believes it is owed. This amount must be paid or appealed within 60 days. In rare cases Medicare will adjust their final demand amount, but by this point it is often difficult to get adjustments made.
This is only an overview of some of the issues that arise for a Medicare recipient who is seeking compensation for an injury. Given the stakes involved, the correct approach is always for the attorneys handling the personal injury case to also assist with the Medicare compliance process. Making mistakes with the Medicare process can lead to long, frustrating delays that are best avoided.
For over 45 years the law firm of Greenman Goldberg Raby Martinez has helped clients in the Las Vegas area recover compensation in personal injury cases. We help clients navigate the Medicare process and get the compensation they deserve. Call us today for a free attorney consultation at 702-388-4476 or send us a request on our contact page.
Many personal injury cases never go to trial. For defendants, reaching a negotiated settlement can be preferable to the risk and expense of a drawn-out court battle. For the injured plaintiff, settlements can have a number of benefits as well.
What is a settlement?
Before getting into the question of whether it’s a good idea to settle, it’s helpful to understand what a settlement is. Settlements only take place after a law suit has been started—that is, the plaintiff has filed a complaint against the defendant, making certain assertions about the defendant’s liability for the plaintiff’s injuries. A defendant typically hires an attorney to respond to the complaint, and the parties begin to assemble their case.
The American legal system is designed to encourage the parties involved in civil litigation to reach settlements. A settlement saves the limited resources of the court system by avoiding all the complex work that goes into a courtroom trial. For that reason, courts will encourage the parties in a lawsuit to explore settlement. For some issues, the law requires a good faith effort by both sides to come to a pre-trial agreement.
The court involved in the case oversees the settlement negotiation process. In fact, the negotiation of a settlement can itself be fairly complicated, especially if one side is not acting in good faith. Settlement negotiations can take place in front of a professional mediator, who helps the two sides come to common ground. When the parties reach an agreement the court must approve it before it is finalized. In doing so, the court also closes the litigation case on the terms agreed upon by the parties.
There are a number of good reasons for an injured plaintiff to settle a case before it goes to trial:
- Certainty and control. A trial always involves the risk that the judge or jury will not find in the plaintiff’s favor. A settlement eliminates that possibility, while giving the plaintiff a greater say in the details of the final outcome.
- Faster results. Court procedures can take months or even years, especially if the defendant appeals the decision of the trial court. A settlement can result in the plaintiff getting compensated more quickly.
- Lower costs. Although a personal injury plaintiff’s attorneys typically work on contingency (that is, we don’t get paid until the plaintiff gets paid), attorneys are still entitled to recover for expenses incurred in preparation for trial. Compared to a settlement negotiation, a trial involves many more hours of lawyer work and can require expensive developmental work like expert testimony. In a settlement the plaintiff can receive a larger share of the final payout.
Potential reasons to reject a settlement
Some plaintiffs may want to push through to trial. Here are some examples:
- The defendant’s settlement offer is low relative to the amount the plaintiff believes is owed.
- The plaintiff wants the defendant’s bad behavior to be exposed. A trial is a public event, whereas a settlement’s terms may be confidential. Of course, a plaintiff may want the details that would come out during trial to be kept confidential as well
- Bad faith or dishonesty by the defendant makes settlement undesirable.
GGRM is a Las Vegas personal injury law firm
The attorneys at Greenman Goldberg Raby Martinez have represented personal injury clients in the Las Vegas area for more than 45 years. If you have been injured we are happy to review your case and discuss your legal options with you. Call us today for a free attorney consultation at 702-388-4476, or request a call through our website.