It's one of the most common personal injury lawyer questions (http://www.zacharassociates.com/personal-injury-wrongful-death-faq/) that are asked. How soon does a client receive settlement money, and when is it disbursed to the client?
The best way to answer this question is to explain the process involved with disbursing settlement proceeds
First and foremost, the injury attorney needs to prepare a “final accounting.” This means that the attorney has to tally up his/her total costs and confirm who is to get paid what amounts from the settlement proceeds.
While many costs are documented as they occur (such as payments out for records, reports), what are often referred to as “soft” costs (photocopies, faxes, postage, long distance phone calls, etc) are often finalized once the case settles. Of course, some firms charge a flat rate for soft costs, in which case it’s not at issue at settlement time.
Who gets paid what from a settlement can be simple, but it can also be complicated. A client is personally responsible for any accident related medical expenses they incur, but not all such expenses necessarily need to be paid from settlement proceeds.
Only those medical providers protected by a “lien” must be paid from settlement proceeds.
Such liens can be consensual (the client signs the lien with the provider promising to pay their bill from any recovery), some can be recorded (the provider files a lien with the County Recorder’s Office), And some can be statutory (such as governmental Health Plans like AHCCCS or Medicare).
The attorney has to confirm balances due to any provider either entitled to payment or that the client wants to be paid. Sometimes the attorney seeks reductions from providers, but the amount of any potential reduction often depends on the amount of the settlement.
Under Arizona law, only certain Health Plans are reimbursable, and some of those might reduce while others will not.
In such circumstances, the attorney first needs a payment ledger from the Health Plan to confirm that all claimed payments were indeed for accident related treatment. This can take some time, especially with certain Health Plans, such as Medicare.
In addition to having all of the above mentioned ducks lined up in a row, the client needs to endorse a settlement check and sign a “release” in exchange for the check.
Once the check is endorsed, it gets deposited into the Attorney’s Trust Account until it “clears,”, a process that takes three to ten business days.
Only after the check clears can everyone entitled to payment be paid from the settlement proceeds, including the attorney and the client.
If everything described above was accomplished before the attorney receives the settlement check and release, settlement proceeds can be disbursed within three to ten days of executing all of the settlement paperwork.
If some of the things described above have not been done by the time the settlement check and release arrive, actual disbursement can be delayed by weeks and sometimes even months.