What You Need to Know About Settlements

A settlement or jury award will never fully make up for the time spent, injuries sustained, and inconveniences incurred because of your specific incident. However, money is the only thing our system has available to help compensate you for your damages and losses. While we would never say that the money makes it worth going through all the pain, doctor visits, and further inconveniences, we at Zaner Harden Law can promise you that we will work tirelessly to provide you the very best result. Rest assured, we make the insurance companies lay out every dollar on the table that they have to spend on your case and we will get you the maximum value possible for your case. The best way to find out if past clients are happy with an attorney’s services (and the result) is to look for online reviews of that firm. Check out sites like Google, Avvo, and Thumbtack. These are independent sites that accept reviews of all attorneys. Be wary of looking at reviews that are just posted on an attorney’s website as there is not way to verify that those are actual authentic reviews.

How Settlement Awards Are Disbursed

Once your case is settled for a certain amount, there is still a lot of work that must be done before you can get your check. The check from the insurance company must first be deposited into the firm’s client trust account. Receiving a check, depositing it, and then letting the deposit settle with the bank can sometimes take several weeks.

Once the check has settled, Zaner Harden Law will then have to take a close look at your entire file and evaluate a number of factors, including how much you owe back to health insurance or healthcare providers. This is a critical step because your health insurance, lien company, or other providers have a legal right to be paid back for any treatment they provided. If you have a skilled attorney, he or she will be able to negotiate these amounts down to as little as possible so more goes into your pocket.

Not all lawyers will do this; some firms will hire an outside company to negotiate with the insurance company and then they will take money out of your settlement for this service. Zaner Harden Law does not do this; Zaner Harden Law negotiates these balances down in-house and considers it part of the attorney fee you are paying them.

Once the balances have been reduced, the firm will then draft a “distribution statement” which will break down your settlement in great detail and will show you how much money will be going into your pocket. At that point, the firm will schedule a time for you to come in, review, and sign the distribution statement. If you have any questions about your settlement, you are of course free to ask them before signing anything. Once the distribution statement is signed, the firm will hand you a check which you can then deposit in any bank account with your name on it.

Tax Issues to Be Aware Of

The general rule regarding personal injury settlements is that they are tax-free. The underlying logic of this is that a settlement is not “income” like a salary or bonus is – it is money which is needed to make you whole and bring you back to where you were before the crash occurred. For this reason, the government is generally not entitled to any taxes from the settlement.

However, some parts of the settlement may be taxable – including parts of the settlement that are considered wage loss. Clients who do have questions about the tax implications of their settlement are advised to speak to their accountant or a tax attorney.

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Six Potential Phases of an Injury Case

There are four main phases of a personal injury case. Five phases if litigation is necessary and six phases if we go to trial. We’ll discuss them in more detail below:

1. Start-Up Phase

This is when your attorneys send out the necessary representation letters to all necessary parties: including the at-fault driver’s car insurance, your car insurance, your health insurance, and other important players.

At this stage, the lawyers are making sure they uncover all potential sources of recovery (insurance) and do everything that is required under the policies to ensure your rights are protected. If certain steps are not taken with your own policies, you may lose coverage.

At this stage your lawyers will also be investigating the case to look for other potentially responsible parties as well as looking for helpful pieces of evidence that may not last for very long (videos, witness, statements, etc.) In a perfect world, its best to acquire legal representation early on so all of these steps can be taken care of quickly. This sets up the case the right way from the start.

2. Treatment Phase

During this stage, your only focus is to follow your doctor’s recommendations and work on getting and feeling better.

It’s important to take the appropriate length of time for your body to heal. This looks different for everyone, as the same injury can heal at different speeds for different people.

Because settlement is a one-time deal, it’s crucial to settle (or attempt to settle) at the right time. If you settle too early, you risk needing future medical treatment and not getting the proper funds from a settlement to pay for it.

As attorneys, we are here to monitor your treatment, not direct it. Only you know how your body feels in comparison to before the incident. What you need to do to feel better is a decision made between you and your doctors. If needed, we can help you connect with the right doctors.

3. Demand Phase

This is where your story is told to the insurance company. First, we gather medical records and bills from all the
doctors you visited for incident-related care. We then create and send a “demand packet” to the insurance company.

In this demand, we tell the insurance company how the incident occurred, why their insured is at fault, the types of injuries you sustained, the type(s) of medical treatment you received, the medical bills you incurred, and how your injuries affected your life. We also include the miles you had to drive to go back and forth from doctors’ appointments and any wage loss you incurred because of your injuries.

Examples of Wage Loss

Maybe you used to work full time but now you can only work part time because of your injuries; or over the span of several months you missed a week of work so you could go to physical therapy; or maybe you missed two months of work because you were recovering from a surgery you needed to get. All of these would be considered wage loss.

4. Negotiations/Settlement Phase

Once the insurance company reviews the demand packet, we start negotiations in an attempt to settle your case.

We ask the insurance company to start with their initial offer. This offer is typically quite low, as the insurance company is trying to settle your claim for the lowest dollar amount possible. Our mission is to get you top dollar for your claim and we will accept nothing less.

After going back and forth with the insurance on numbers, we will finally get them to their “top” amount. This is the number they have valued the case at and are willing to pay to avoid court.

This is when you and your attorney have an honest conversation about your case. You will discuss both the positive and negative facts about your case and ultimately, whether the insurance company’s top amount is an appropriate number to settle your case.

As always, we are there to offer our advice, but the final decision is yours. The decision not only takes into account the actual dollar amount, but also weighs the risks and benefits of not accepting the settlement amount. Ultimately, you and your attorney decide whether to accept the settlement or initiate litigation and file a complaint within the court system.

5. Litigation Phase

Litigation does not guarantee a trial. Litigation begins by filing a complaint within the court system. From there, settlement may still occur at any point before trial.

Usually, the time between filing a complaint and starting trial is one year, so there is plenty of time to settle if you so choose. Think of it as a marathon rather than a sprint.

Once a complaint is filed, we wait for the insurance to file an “answer.” The answer is their response to the claims we allege in our complaint. Then the “discovery” phase starts, which is when both sides gather evidence on their own and asking the other side for any evidence in their possession.

Depositions come next, where the insurance company and your attorneys get to formally ask people (including you,
your doctors, any witnesses, maybe even your friends) questions under oath.

After depositions, the parties will likely schedule a mediation. Mediation is when both sides agree to speak with an unbiased mediator (usually a retired judge) about settling the case before a trial becomes necessary. The case may or may not get settled here. If not, trial is the next step.

6. Trial Phase

When the parties cannot agree on a settlement amount, trial becomes necessary. Trial is a formal process, where both sides argue their case, a judge makes decisions about the law, and the jury makes the ultimate decision about how much money, if any, you the Plaintiff are entitled to receive as a result of the incident. A trial usually lasts somewhere between two to five days.

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Determining Whether You Have a Case

You should always meet with an attorney to discuss your unique situation and whether or not you have a case.

Generally speaking, if you have been involved in a motor vehicle crash that was not your fault and were injured, you have a case. Our requirements at Zaner Harden Law mirror the requirements under the law.

Here is a checklist of things we look for when considering a car accident
case:

  • Did another driver have a duty to you to drive safely and carefully?
  • Did that other driver breach that duty and drive negligently, such as rear-ending or failing to yield to your vehicle?
  • Did the other driver’s actions cause you to sustain injuries?

If the answers to these questions are all “yes,” you usually have a case.

An Attorney Can Help Identify Specific Nuances

The reason why you should always consult with an attorney is because there are unique circumstances surrounding each potential case.

For example, what if the crash was partially your fault and partially another driver’s fault? You and your attorney will have to take that into consideration.

Also, how long ago did the crash occur? In Colorado you have three years to file a lawsuit against the at-fault driver (other states have different deadlines).

Does the at-fault driver have insurance? If not, your attorney will need to look into the details of your own insurance coverage.

Download the Ebook

Want more information?

Download our guide to understanding personal injury claims in the state of Colorado. This comprehensive resource contains everything you need to know about injury law and answers some of the most frequently asked questions we get on a daily basis. There is hope after your injury.

Get Your Free Copy Now