Whether you have been injured in a pedestrian accident at the intersection of Memorial Drive & North Hairston Road or in a crash on the 1-285 Perimeter, you may be entitled to recover compensation through a personal injury settlement. Even so, insurance companies often try to deny or delay settlements or offer less than what the claims are worth.
Understanding how personal injury settlements are paid out in Georgia is essential to making informed decisions about your claim. Issues such as the Hospital Lien Act and the requirements for Interest on Lawyers’ Trust Accounts (IOLTA) can significantly affect how your settlement is paid out.
This article serves as a guide to help you know what you can expect in the settlement payout process, so there are no surprises at the end of your case.
Overview of the Settlement Payout Process in Georgia
You will be eligible to receive a settlement when both sides agree on the compensation amount without having to go to court. Just as your attorney handles all negotiations with the insurance company, they will also be responsible for disbursement. But several steps must be completed before you can receive your payment.
Steps 1-3: Signing the Release, Receiving the Check, and Trust Deposit
After both sides have agreed on a settlement amount, the insurance provider sends a “release” document. By signing the release, you agree to give up your right to seek compensation through any future claims against the at-fault party.
Once you sign the release, the matter cannot be reopened, even if your condition worsens. You should allow your attorney to review the release document carefully before you sign. You must understand the full scope of what you are giving up when signing the release.
After the insurer receives the signed release, it will issue a check, typically within 21 to 30 days. Unlike other states, Georgia does not have specific laws that address how long the insurer has to issue a payment. But an unreasonable delay may constitute evidence of bad faith by the insurance company.
In most personal injury settlements, the check is made payable to both you and your attorney. The check will be sent to your attorney’s office and not directly to you.
Georgia Bar rules dictate that attorneys must deposit settlement funds into Interest on Lawyers’ Trust Accounts (IOLTA). An IOLTA is an account that operates separately from the attorney’s operating funds and protects your money. The check must clear, in most cases, 5 to 10 business days for large deposits, before the funds can be released.
Steps 4-5: Deductions, Medical Liens, and the Disbursement Sheet
Georgia personal injury attorneys generally charge a contingency fee of 33.33% (one-third) of the settlement if the case is settled without going to court. If the case is resolved through litigation, the contingency fee increases to 40%.
All of your attorney’s case expenses, such as those related to filing fees, medical records,d expert witness fees, and court costs, are reimbursed from the settlement.
Under Georgia’s Hospital Lien Act (O.C.G.A. § 44-14-470), hospitals can place a lien on your settlement that must be paid before you receive your settlement payment. Additionally, if your health insurance provider, Medicaid, or Medicare paid claims for accident-related treatment, they may have the right to be reimbursed from the settlement.
A skilled attorney can often work with the various entities to negotiate the lien amount. Negotiating a lien is a vital legal service that your attorney can provide, which can significantly increase your net recovery.
For example, suppose the hospital that treated you billed $30,000. Your attorney may be able to negotiate and have the lien reduced to $15,000, saving you a substantial amount of money. If your health insurer or ERISA plan pays claims, they may assert subrogation rights per your policy.
Your attorney should identify all liens before releasing any funds. The following breaks down how every dollar is accounted for:
- Total settlement amount: $100,000.00
- Attorney’s fee: (33.3%) -$33,333.33
- Itemized case expenses: $1,500.00 (fees for police reports, medical records, expert medical review, and postage and filing costs)
- Medical liens: $15,000.00 (each listed with amount paid)
- Health insurance subrogation claims: $5,000.00
- Net recovery: $45,166.67
Your attorney should take the time to walk you through, line by line, how fees are deducted before issuing your check. Under Georgia law, you have the right to question any deduction.
When You Receive Your Check and How Long It Takes
Once all dedications have been paid, your attorney will issue your check from the trust account. You can choose whether to be issued a physical check or receive the funds through direct deposit. In most instances, there are no taxes due on personal injury settlements. The timeline from signing the settlement agreement to receiving your check generally runs 4 to 8 weeks.
Factors that can cause delays include:
- Lien negotiation, which can add weeks or months if ERISA or Medicare benefits are involved.
- The insurer delays issuing the check.
- Various bank hold times for large checks
Lump Sum vs. Structured Settlement
You have the option of receiving your entire settlement at once or through a structured plan. Lump sum payments are most common for settlements under $500,000. Structured settlements, which are paid over time, either monthly or annually, are commonly used for large settlements, especially if the case involves a minor or catastrophic injuries.
Each form of payment has its own distinct advantages. For example, a structured settlement allows you to have a guaranteed source of income, potential tax benefits, and prevents you from spending the entire amount too quickly.
Conversely, if you choose a lump sum payment, you can have flexibility and immediate access to your money. If a minor receives a settlement, Georgia law (O.C.G.A. § 29-3-3) requires the court to approve the settlement. Often, structured settlements or conservatorships are required to ensure that the money is spent wisely and benefits the intended party.
Contact Durham Law Group today at 404-845-3434 or 813-333-6250 for a free consultation with no upfront costs, with contingency fee arrangements.
