If your personal injury claim has reached a settlement, or you've gone to court and won a judgment at trial, then the defendant probably has liability insurance that covers the underlying accident. After settling an injury case, your lawyer will simply wait for the insurance company's settlement check to come in the mail. It's different if you won at trial, which could mean an appeals process needs to play out before you will see a check for the court-ordered damages award.
Let's look at the usual procedures for processing a personal injury settlement, how appeals work, and what often happens when the defendant is uninsured.
If you file a personal injury lawsuit and you and the other side reach a settlement agreement before trial, the lawyers will report to the court that the case was settled. The court will then issue an order of settlement, which will require the parties to complete all of the settlement papers within 30 or 60 days, depending on the jurisdiction. The most important settlement paperwork is the Release.
The Release is a document prepared by the defense attorney and setting forth the settlement terms. There is no legal reason why it can’t be a relatively short document, but some defense attorneys and insurance companies insist on a ten or fifteen- page document dense with legalese. Once the defense attorney prepares the Release, it will be sent to your lawyer for approval. Depending on what is in the document, the Release can be very straightforward, but certain language can be objectionable.
Your lawyer will read carefully to determine whether all terms are acceptable. Sometimes, the lawyers will argue for days over the terms of the Release. They generally reach an agreement, but if they don’t, they will request that the judge step in. This can slow things down considerably.
Once the Release is acceptable, your lawyer will send it to you to sign. You will usually have to sign it in front of a notary public, sometimes in triplicate. Before signing it, you will want to read it carefully and discuss it fully with your lawyer, making sure that all your questions are answered. Once the document has been signed and returned to the defense attorney, the terms and the language are final.
Before your lawyer can disburse your share of the settlement proceeds to you, any personal injury lien must be resolved. A lien is a legal right to someone else’s assets. The two kinds of liens that usually exist in personal injury lawsuits are medical liens and governmental liens. Medical liens are held by health care providers and health insurers who paid for medical treatment in connection with the underlying accident. Governmental liens are usually from Medicare, Medicaid, or from a child support agency.
Liens must usually be paid off before the plaintiff can receive anything from the settlement.
If you win your lawsuit at trial, the defendant will usually appeal. This is a long process. It can take a year or more for the appeal to be prepared, considered by the court, and decided. The appellate court can do one of three things with the judgment:
If the appeals court upholds or reverses the judgment and your state has two levels of appellate courts, either you or the defendant can appeal again to your state’s highest court (usually called the state "supreme court"). This highest court can then uphold or reverse the judgment or send the case back to the trial court for a new trial. If your case is sent back for a new trial, then you have to do the whole trial all over again. And after the second trial is over, either side can appeal (again!). You can see why most plaintiffs agree to settle their personal injury cases.
Personal injury lawyers rarely take cases against defendants who have no insurance coverage in place for the underlying accident. This is because people who carry no insurance usually have limited assets. There is usually no good reason for suing someone with no money.
But in some situations no insurance policy covers the accident, but the defendant does have significant personal assets. In such a case, the settlement procedures would be the same as in a case where the settlement or verdict was funded by an insurance company, except that your lawyer would certainly want to get a certified or bank check from the defendant before turning over the signed Release, and agreeing to dismiss a lawsuit (or agreeing to give up the right to file one).