Settling a personal injury claim can bring a sense of relief after a stressful period. Many people opt for settlements over trials because they are typically faster, less expensive, and less complicated. However, a common point of confusion arises after a settlement is reached: the settlement check isn’t sent directly to you, the claimant, but to your attorney. This understandably leads to the question: “How Long Can A Lawyer Hold Your Settlement Check before you receive your funds?”
This article will clarify the process of settlement check disbursement, explain the legitimate reasons for potential delays, and outline your rights if you believe there’s an unreasonable hold-up. Understanding these steps can help you navigate the final stages of your personal injury claim with confidence.
Your Settlement Funds and the Client Trust Account
Your Attorney’s Client Escrow Account
When the insurance company or the at-fault party issues a settlement check, it is made payable to your attorney or law firm. Upon receipt, your attorney is ethically and legally obligated to deposit this check into a special account known as a client trust account, or sometimes referred to as an escrow account. This account is strictly regulated and designed to keep client funds separate from the law firm’s operating funds.
The primary reason for this process is to ensure that the funds are held securely and are available to be properly disbursed to you after the check clears. Attorneys cannot legally release any settlement funds until the deposited check has fully cleared the bank. This clearance process typically takes a few business days, but can vary depending on banking institutions and the check amount.
Understanding Deductions from Your Settlement
Delays in receiving your settlement funds can sometimes stem from the necessary deductions that must be made from the gross settlement amount. These deductions are standard practice and cover various expenses related to your case. Common deductions include:
- Legal Fees: Most personal injury attorneys work on a contingency fee basis. This means their fees are a percentage of your settlement recovery, and they only get paid if you win. This percentage is agreed upon in advance, usually ranging from 30% to 40% of the total settlement. This fee compensates your attorney for their legal services in representing you.
- Case Expenses: Throughout your case, your attorney likely incurred various out-of-pocket expenses. These “case expenses” can include court filing fees, costs for obtaining medical records, deposition costs, expert witness fees, mediation fees, and travel expenses. These costs are typically deducted from the settlement unless you have previously paid them.
- Medical Liens: If you received medical treatment related to your injury and your health insurance didn’t cover all the costs, or you didn’t have health insurance, you might have a medical lien. A medical lien is a legal claim by a healthcare provider against your settlement to ensure they are paid for their services. Your attorney will need to address and potentially negotiate these liens to ensure proper payment to medical providers out of your settlement funds.
- Subrogation Claims: Similar to medical liens, subrogation claims can arise from your health insurance company. If your health insurer paid for medical bills related to your injury, they might have a right to “subrogate,” or seek reimbursement from your settlement. Your attorney may need to negotiate with your health insurance company to reduce the subrogation claim amount before disbursing your funds.
Calculating legal fees and case expenses is generally straightforward. However, negotiating and resolving medical liens and subrogation claims can sometimes take additional time, contributing to a slight delay in the final disbursement of your settlement check.
Bank Processing Times and Potential Delays
Even after deductions are calculated, bank processing times can introduce minor delays. As mentioned earlier, your attorney’s bank needs to clear the settlement check deposited by the insurance company. Similarly, when your attorney issues you a check for your share of the settlement after deductions, your bank also needs time to clear that check. While bank clearance is usually quick, typically within a few business days, it’s a necessary step in the process.
In most cases, these standard processes do not cause significant delays. However, certain situations can lead to longer waiting periods.
Special Circumstances That May Extend the Timeline
While the goal is always to disburse your settlement funds as quickly as possible, some circumstances can legitimately extend the timeframe. These “special cases” are important to be aware of:
Complex Settlement Agreements and Release Language
Settlement agreements are legal contracts. They not only stipulate the settlement amount but also include a “release,” where you agree to release the at-fault party from any further liability related to the incident. Sometimes, while parties agree on the settlement dollar amount relatively quickly, negotiating the specific wording of the release can take time. This is especially true in more complex cases. While this negotiation is legitimate and ensures all parties are protected, it can add to the overall time before funds are disbursed. If you are unaware of this process, you might misinterpret the release negotiation time as a delay in receiving your money.
Settlements Requiring Court Approval
In certain situations, a settlement agreement might need to be approved by a court before funds can be released. This is common in cases involving minors (individuals under 18 years old). Because minors cannot legally pursue claims on their own, settlements reached on their behalf by parents or guardians often require court approval to ensure the settlement is in the child’s best interest. The court approval process can add weeks or even months to the timeline, depending on court schedules and procedures. Similarly, settlements for individuals deemed legally incompetent may also require court approval.
What is a “Reasonable” Timeframe?
Generally, attorneys are expected to disburse settlement funds to their clients within a “reasonable” timeframe. While there’s no hard and fast rule universally defining “reasonable,” a common benchmark is within 30 to 45 days from the date you formally sign the settlement agreement. This 30-45 day period is considered a ballpark estimate. The specifics of your case can influence the actual timeline.
If you have been waiting longer than 30 days since the settlement agreement was finalized and you haven’t received your funds or a clear explanation for the delay, it is reasonable to inquire with your attorney about the status of your settlement disbursement.
Is the Delay with Your Attorney or the Insurance Company?
If you are experiencing a delay, it’s important to consider that the holdup might not be with your attorney, but with the insurance company responsible for issuing the settlement check. Large insurance companies often have bureaucratic processes, and obtaining all necessary internal approvals for large payouts can take time. It’s prudent to allow them a reasonable processing window.
However, it’s also important to be aware of insurance regulations. For instance, in Florida, Florida insurance law mandates that insurance companies must make settlement payments available within 20 days of finalizing the settlement. After 20 days, if payment is delayed, interest at a rate of 12% per year begins to accrue from the 21st day.
If you suspect the insurance company is causing an unreasonable delay, your attorney can take steps to enforce the settlement agreement. Once signed, a settlement agreement becomes a legally binding contract. Legal action can be taken against the insurance company to enforce the contract, potentially including garnishing their bank accounts to ensure payment.
Addressing Concerns About Your Attorney
While most attorneys handle settlement disbursements responsibly, there are rare instances where issues may arise. If you genuinely believe your attorney is unreasonably delaying payment or has misused your funds (which is a serious ethical and legal violation), you have recourse:
- Communicate and Inquire: The first step is always to communicate directly with your attorney. Politely inquire about the reason for the delay. A simple misunderstanding or a legitimate reason might be easily clarified.
- Threaten to Report to the Bar: If you suspect misconduct and communication is unproductive, informing your attorney that you will report them to the state bar association (in Florida, the Florida Bar) can sometimes prompt action. Bar associations oversee attorney conduct and have disciplinary power.
- File a Misconduct Complaint: You have the right to file a formal misconduct complaint with the Florida Bar if you believe your attorney has acted unethically or illegally. The Bar will investigate your complaint and can impose sanctions, ranging from reprimands to disbarment, if misconduct is found.
- Consider Legal Action Against Your Attorney: In extreme cases of demonstrable misconduct or mismanagement of funds, you may need to file a lawsuit against your attorney. This should be a last resort after exhausting other avenues and with clear evidence of wrongdoing.
It is crucial to remember that most delays are due to standard procedures or external factors like insurance company processing or bank clearance. However, understanding your rights and the expected timeline empowers you to address any concerns effectively.
Early Legal Involvement in Your Personal Injury Case
How Long Can a Miami Personal Injury Lawyer Hold Your Settlement Check?
Engaging a Miami personal injury lawyer early in your case provides significant advantages. Beyond navigating the complexities of your claim and maximizing your potential settlement value (how much your claim is worth), an attorney can also ensure a smoother settlement disbursement process. Many firms, like ours, offer a free initial consultation at (305) 937-0191 to discuss your case. Personal injury lawyers operate on a contingency fee basis, meaning they are motivated to resolve your case efficiently and ethically, including the prompt disbursement of your settlement funds once received.
