When a negligent opposite party is responsible for damage and loss in an accident, the victim can rightfully pursue a personal injury claim. Though some cases go to court, most get settled out of court with compensation extended to the victim. This removes the uncertainty associated with the courtroom decision.
In such cases, it is important to understand how these settlements work and how much of the amount can be retained by you after fees and expenses. Understanding these will help you build realistic expectations.
This blog serves as a guide for you to understand how PI settlements work and gives a personal injury settlement breakdown so you’ll know what you get to keep.
Understanding the Basics
A personal injury settlement is the legal understanding between two parties to resolve the claim launched by the victim against the at-fault party.
The settlement amount is the remuneration provided to the victim to cover the present expenses related to the accident, as well as the future expenses arising from the accident.
A settlement is the amount negotiated and mutually agreed upon by both parties, unlike in legal proceedings, where a judge or jury decides it.
The final amount is often less than the actual agreed-upon amount or headline figure. It is important to understand how the funds are distributed as well as study the settlement breakdown to understand how the funds are distributed.
Common Deductions from a Settlement
The costs that are typically deducted from the settlement before reaching the plaintiff are:
- Attorney’s Fees: The personal injury lawyers work on a contingency basis or take a percentage of the settlement, normally between 25% and 40%.
- Case Costs: Filing fees, expert witness fees, medical records, and deposition costs are dispensed from the settlement.
- Medical Liens: If injuries were treated by health insurers, hospitals, or other providers, the expenses are recovered from the settlement.
- Outstanding Debts or Obligations: If the case requires the settlement of debts, they could be used for child support arrears or government liens.
Factors Affecting the Settlement Amount
The final settlement that a plaintiff gets can vary and depends on several factors:
- Injury Severity: Larger settlements are awarded if injuries are serious due to higher medical expenses and liens.
- Litigation Length: Cases running for a long time will cost more and diminish the final amount.
- Policy Cap: The settlement amount can be affected if the defendant has limited policy coverage.
- Negotiated Reductions: Attorneys can negotiate and reduce the amount owed to the medical providers or lien holders. This will reduce the total owed amount and increase the final settlement amount.
The above factors normally influence the compensation amount and result in two plaintiffs with the same injuries receiving different amounts.
Structured Settlements vs. Lump Sum
The personal injury settlements may be settled as a lump sum or as a structured settlement. In this structured settlement, the payment will be distributed over time. Structured settlements, although they limit access to funds, at the same time provide financial stability, especially for those with long-term medical needs.
Keeping Perspective on Settlement Amounts
Often deductions eat into the final settlement amount, and it can be disappointing. However, it should also be understood that these funds help recover necessary costs and help stabilize after the devastation of an accident. Attorney’s fees help with getting skilled legal representation and pay for good healthcare services and therapies, which are necessary.
However, if the client has suffered severe injury, they may receive a large settlement sum. It is important to employ a legal professional to negotiate the amount to arrive at a fair number. The attorney will help determine whether you have legal grounds for your complaints, as well as protect your rights and get you the rightful amount.
