One of the most common questions on the topic of a personal injury case settlement is “How does a personal injury settlement get paid out?” Well, the truth of the matter is that it can vary from case to case and state to state. This guide will focus on how personal injury compensation is paid in the state of Oregon.
Understanding Personal Injury Settlements
Before we dig into the details of how a personal injury legal settlement is paid, let’s first focus on what we mean when we talk about a “settlement” in a case like this.
The majority of personal injury cases end in settlement. This means that instead of having to go to trial and let a judge or jury decide a verdict and the amount of compensation (if any) to be awarded, the parties involved in the case instead decide on a fair amount of money for the victim to receive. This resolves the case, with all parties agreeing to end it there and move on once the personal injury settlement has been received, with no further legal action taken.
This has a lot of advantages, with the biggest one being that legal settlement removes the need for any court proceedings. Trials and court appearances can take a lot of time, money, and resources, dragging out the process of injury claim resolution. Many people prefer to avoid that hassle, so seek a personal injury settlement instead, with the aid of their Portland personal injury attorneys.
Another big benefit of trying to reach a personal injury case settlement is that it ensures that the victim will receive at least some kind of payout. If a case goes to trial, even with plenty of evidence and a good personal injury attorney, you can’t always guarantee that the result will fall in your favor, and you might end up with less than your settlement offer.
The Settlement Agreement
Next, let’s dig into the details of how a personal injury legal settlement agreement is made.
Negotiation process between parties
Naturally, to reach a legal claim settlement that both parties can agree on, they both need to be involved in the negotiation process. This is, in a nutshell, what settlement is all about – the two sides of a dispute coming together to discuss a fair and reasonable settlement amount that they can both agree on.
Role of attorneys in settlement negotiations
Attorneys will usually be the ones doing most of the negotiation on behalf of the parties involved in the case. For example, if a victim has had a bicycle accident, bicycle accident lawyers will negotiate on their behalf, using the evidence available and their understanding of personal injury laws in Portland to reach a reasonable agreement.
Terms and conditions included in a settlement agreement
The attorneys and other parties involved in negotiating the settlement will also decide on all relevant terms and conditions for the settlement agreement. That includes, for example, the date that payment(s) should be made, how payment(s) should be made, and so on.
Again, this is why it’s wise to contact our experienced personal injury lawyers, as they understand the relevant settlement negotiation tactics and common conditions for a strong agreement.
Types of Settlement Payments
Now we know how a settlement is agreed on, let’s take a closer look at how it gets paid out. In general, there are two main forms a settlement payment can take: a lump-sum payment, or a structured settlement payment.
Lump-Sum Payments
As the name suggests, a lump sum settlement is when you get the entire settlement amount in one single payment. So, let’s say you’ve agreed to a settlement of $250,000 as a lump sum, then that means you’ll receive a full $250,000 all at once.
There are lots of advantages to this, and lump sum settlements are often favored in situations that don’t involve any long-term injuries or recurring medical costs. The lump sum allows the victim to essentially pay off their existing bills related to the injury and then move on with their lives, with additional funds possibly left over to cover other bills, to invest, or to spend as desired.
However, there are some downsides to this. The main issue is that recipients might be tempted to spend or invest all of their settlement money quite quickly, and they could end up with unexpected expenses later on that they aren’t able to cover. Or, they might spend or invest it unwisely and lose value in the long term.
Structured Settlements
The other option to receive your claim settlement amount is in a structured format. This means that your payment will be spread out, and you’ll receive it in set amounts stretched across a set period. For example, you might get $10,000 every quarter, for example, or another amount each month, over a period of several years. The amounts and durations depend on the nature of the case and the size of the settlement.
Structured settlements, like lump sumps, have pros and cons. One of the big benefits is that the victim effectively has a regular source of income for the duration of the settlement payment structure. This can help to cover recurring costs related to the injury, like medical bills, rehabilitation, or loss of income. It also becomes a little easier to budget and plan when you know how much you’re going to get (and how long for).
Meanwhile, on the downside, a lot of your funds will essentially be locked off and inaccessible to you until the allotted time comes. That can be frustrating, and you won’t be able to take excess funds if any unexpected expenses arise. Plus, you’ll have less investment power compared to a recipient of a lump sum payout.
The Payment Process
Whether you decide on a lump sum or structured payment as part of your settlement agreement terms, the next part of the post-settlement procedure is to receive that money. Here’s how it works.
Steps involved in receiving settlement payments
- Both parties agree on how and when the settlement will be paid.
- Both parties will sign a settlement agreement.
- The responsible party will then make payments according to the agreed terms. This may involve either a direct transfer to the victim or a transfer to an annuity or financial product of some kind, which will then pass the funds along to the victim.
- The victim should monitor and ensure that all payments are received on time.
Timeframe for receiving payments
The timeframe for receiving your payments will depend on what you’ve agreed with the aid of your attorney, as outlined in the terms and conditions of the settlement agreement. In most cases, the first part of a settlement payment should be quite quick to arrive, sometimes within a matter of days after the agreement is signed, or at most within a few weeks.
Factors Influencing Payment
A very broad range of factors may influence the amount of the payment received. Such factors can include the severity and nature of the accident, the amount of expenses incurred by the victim (medical bills, etc.), the long-term risks related to the injury, like a possibility that the victim may not be able to work in the same job ever again, and so on. The expertise and negotiating abilities of the victim’s attorneys will also have a big influence on the final payment total.
Dealing with Delayed or Denied Payments
As stated, both parties should agree to a payment structure and schedule as part of the settlement agreement. If payments are delayed or simply don’t arrive in full or on time, then the payer may be held in breach of the agreement. This should be reported to your lawyer, who can then take the next appropriate steps.
All in all, the process of actually receiving your money after a settlement agreement isn’t usually too difficult, but the settlement negotiation process is a lot trickier, requiring plenty of expertise to help you get the best possible outcome. That’s why all injury and accident victims should aim to work with the best possible attorneys to avoid any unnecessary risks while agreeing on a settlement.
