Congratulations, your case has settled! What’s next? Well, unfortunately, the time between the settlement and the time you receive your settlement payment can be quite lengthy. This delay is because the agreement to settle merely starts the process of a series of tasks that must be completed before the at-fault company (known as the Defendant) will release the settlement funds. The most time-consuming part involves resolving your medical liens, which are discussed in more detail in another post.
For ease of reference, generally, these are the steps in the settlement process:
1) Agreement to Settle.
In most cases, the Defendant will offer and you will agree to a specific dollar amount to settle your claim. Based upon our experience, and the strengths or weaknesses of the litigation and/or your specific claim, we will recommend that you accept or reject the settlement offer. If you agree to settle, then we move to step 2.
In some cases, the settlement is designed in the form of a Settlement Program. A Settlement Program normally involves a court-appointed Special Master who will review your individual claim and make a binding decision about how much your claim is worth. By participating in the Settlement Program, you will normally be required to sign a Settlement Agreement and/or a Dismissal of your case before the Settlement Master even considers placing a value on your claim.
2) Signing and Returning Settlement Documents.
Once you agree to a Settlement Offer or agree to participate in a Settlement Program, you will be asked to sign a Settlement Agreement that releases your claims. Once you sign a release, you are prohibited from suing the Defendant again for your injuries.
These settlement papers are often required to be notarized at the time that you sign them, which can often be done at your local bank. Alternatively, we may be able to notarize the documents by meeting with you via Zoom at the time you sign.
After the documents are signed, they are returned to the Defendant or the Settlement Master. It is reasonable to expect that a certain amount of time will be given to the Defendant or the Settlement Master to make sure the documents are signed in the correct places, notarized, and to verify that the correct person has signed the documents.
3) Medical Lien Resolution Process.
Stated simply, a Medical Lien is the amount of money that you are required to pay from your settlement funds to repay for the medical care that you received as a result of your injuries. Medical Liens are most often asserted by your health insurance company, Medicare, Medicaid, the Veteran’s Administration, worker’s compensation insurance carrier, or other company/entity that may have paid for any care related to your injury. By law, you must repay these companies/entities from your settlement funds. By law, we cannot release these funds to you.
In almost all cases, the Defendant and/or the Settlement Master will not release your settlement funds until these medical liens are repaid or unless an adequate amount of money is withheld from your settlement to pay the liens once they are finalized (this is often called a “Holdback.”)
Almost always, the Defendant or the Settlement Master appoints a Lien Resolution Company to contact your insurance company or governmental entity to determine if they have paid any of your medical bills and, if so, how much they have paid.
Once they receive a response, the Lien Resolution Company audits the claimed medical expenses to make sure the claimed amounts were actually related to the treatment of your injuries. Once a final dollar amount is determined, the Lien Resolution Company will engage in negotiations to try to get the insurance company or government entity to accept less than they are owed. In other words, the Lien Resolution Company is working on your behalf to lessen the amount that you have to repay.
As you might imagine, this is the longest part of the process. It is not unusual for this part of the process to take 6-12 months. As a result, as discussed above, some of your settlement funds may be released sooner, subject to a Holdback (or an estimated amount that you may owe the lienholder). If the Holdback is greater than the finalized lien amount (which is most often the case), then you will receive a second payment. If the Holdback equals the finalized lien, you will not receive a second settlement payment.
This part of the process is the most frustrating for both the clients and the lawyers. Unfortunately, our hands are tied by the law and there is nothing we can do to speed up the process.
4) Settlement Distribution.
Once the medical liens are finalized, you will receive the entirety of your Settlement Funds, less attorney fees, expenses, and medical liens. Each client will receive a Settlement Distribution Worksheet that shows how the settlement funds have been distributed and to whom it was distributed.
If your liens are not finalized, as discussed above, you may receive a Partial Distribution of your settlement funds, subject to the Holdback for medical lien obligations. Each client will receive a Settlement Distribution Worksheet that shows how the settlement funds have been distributed and to whom it was distributed. If the Holdback is greater than the lien, you will receive a second settlement payment once the remaining funds are released by the Settlement Master or Lien Resolution Company.
5) Closing the File.
Once you receive your final settlement payment, your case is dismissed and your file is closed. However, we hope that you will reach out to us from time-to-time to let us know how you are doing. Thanks for allowing us to represent you!
