How Are Personal Injury Settlements Paid Out?

If you or somebody you love has been injured due to the careless or negligent actions of another individual, company, or entity, you may be entitled to various types of compensation. In general, after you settle a claim with another party, the case is over with.

You will not be able to reopen the claim if the injuries are worse than originally thought, and you will not be able to file a personal injury lawsuit down the line. A settlement check will typically show the total amount paid for the claim, but it may not always be clear who gets how much money after the settlement comes through.

Here, we want to discuss how settlement money is paid out after the check has been written and delivered to the injury victim or their attorney.

how are personal injury settlements paid out


Did You Work With an Attorney?

To be clear, it is not always necessary to work with a personal injury lawyer to settle a claim. However, an attorney is especially useful when dealing with aggressive insurance carriers or larger claims. The good news is that most injury attorneys will take these cases on a contingency fee basis, which means that clients will not have to pay any legal fees until after they have received a favorable settlement or jury verdict.

That said, an attorney will receive the settlement check and pay themselves the amount of money that was agreed upon before they began working on the case. There is no set amount of money that an attorney charges in these situations. Typically, an attorney will work out an agreement to take a percentage of the final settlement or jury verdict, and this percentage usually ranges from 25% to 40%. Most personal injury contingency fees come in somewhere around the 33% range.

Additionally, if an attorney covered the upfront costs of the case, they will also pay these back out of the final settlement check. The costs are different from legal fees and include filing fees for your court case, fees they had to be paid to obtain medical records or other documents, payments for any specialists who consulted on case, etc.

Medical Bills and Liens

Any unpaid medical balances will need to be paid from the settlement as well. Often, doctors and other medical professionals will work to reduce an injury victim’s bills if necessary to leave the victim a reasonable amount of time and receive a settlement for their case. Illinois law allows medical providers to place a lien against any settlement recovery in the injury case. We can look at the Health Care Services Lien Act (“Lien Act”), codified as 770 ILCS 23/1, to see that the liens in these situations shall not exceed 40% of the settlement or jury verdict awarded to the injury victim.

Was There a Legal Loan?

Though not ideal, it is often necessary for injury victims to seek outside financial assistance to help them while their case is ongoing. Legal funding is allowed in most jurisdictions throughout the United States, though there is very little regulation of the lawsuit loan industry. These loans can be used to tide someone over while they await an eventual settlement or jury verdict. However, the loan will have to be paid back out of the final settlement award. The good news about most legal loans is that they are considered non-recourse, which means that injury victims will not have to pay them back if they are not successful with their claim.

What is the Injury Victim Left With?

After paying back medical bills, legal fees, and any other party that has a legitimate claim on the settlement proceeds, the injury victim will keep the remainder of the compensation to cover their possible lost income and other types of non-economic compensation. This can include coverage for their mental anguish, emotional and psychological distress, loss of enjoyment of life, and various other pain and suffering types of damages.

Will an Injury Victim Need an Attorney?

As we mentioned above, not every single injury case will require assistance from an attorney. However, if there is any dispute over fault in the case or about how much compensation should be paid, an attorney will be incredibly beneficial. If an injury victim decides to handle a case on their own, they may be thinking that they can save themselves money by not having to pay an attorney’s legal fees.

However, we need to point out the importance of having someone by your side with extensive resources and legal expertise. Insurance carriers can be incredibly aggressive, and they often push back against paying out any amount of money to an injury victim. Additionally, if there is any dispute over fault, it will be necessary to conduct a complete investigation into the incident to determine who caused the injuries. Often, injury victims who work with an attorney end up securing much more compensation, even after paying back all of their expenses and legal fees, than they would otherwise have had if they had decided to handle their case on their own.

Filing a Case Before the Deadline

Every injury victim needs to know that they have a limited amount of time to file a lawsuit in these cases. The Illinois personal injury statute of limitations is two years from the date an injury occurs. This means that an injury victim has a two-year window with which to file a lawsuit against the alleged negligent party, or they will lose the ability to recover the compensation they deserve, regardless of how clear the fault of the other party is or how severe the injuries.

Is There an Average Settlement Amount?

There is no set amount of money paid out to injury victims in Illinois. The total amount of compensation paid to an injury victim varies depending on the facts and circumstances surrounding each particular situation. Some of the main factors that contribute to how much compensation a victim receives include the severity of the injuries, limits of any insurance policy involved, and whether or not there is any shared fault for the claim.