According to Florida Bar Ethics Opinion 00-2, issued on July 15, 2000, but is not binding, “An attorney should not participate in a settlement arrangement in which an insurance company pays the settlement directly into an account in the client’s name. Such an arrangement circumvents the trust accounting rules, an attorney’s duty to third parties who may have an interest in the settlement funds, and participation in the IOTA [Interest on Trust Accounts] program.”
Although not binding, failure to follow state bar advisory opinions, particularly regarding ethics, leaves an attorney open for potential violations. If you have issues with how a personal injury settlement check should be handled, contact a Florida injury attorney.
The Settlement Check Process
Settling a personal injury claim can take months, or even a year or more, to complete. There will likely be an investigation, pre-trial negotiations, insurance claims, and medical evaluations, and other unanticipated processes. All of this is necessary to reach a settlement between parties.
The settlement check represents the agreed-upon amount of money for all of your personal injury damages. The process generally proceeds as follows:
Signing the Forms
Of course, receiving a settlement check is going to require some signatures. Signatures required may include:
- Order of Settlement. Typically, the Order of Settlement consists of paperwork, with various types of boilerplate information, that must be completed by both sides. The most important document is called the Release.
- Release. No defendant will release any money without a Release. The Release is the plaintiff’s acknowledgment that the settlement is acceptable and states plaintiffs’ understanding that they are “releasing” any and all claims against defendants, both currently known and, usually, unknown; in other words, any claims that a plaintiff may have missed related to the injury being settled and only discovered in the future.
Issuing the Check
After you have signed the Release, the defendant/insurance company will issue the settlement check. The check will typically be payable to both you and your attorney, so the attorney can deduct certain funds from the check before you can receive your money.
Depositing the Check
Your attorney will receive the settlement check, and then deposit it into a trust or escrow account according to law. The funds are held for several business days to be sure the check clears.
Paying Off Debts
If you have any pending liens or certain types of debt (e.g., child support payments), your attorney cannot release your check until they have been paid out of your settlement funds.
Paying Legal Fees and Costs
Once your liens and debts have been paid, your attorney will deduct agreed-upon legal fees and costs from the remaining amount.
Receiving and DepositingYour Settlement Check
After all of the liens, debts, fees, and costs have been paid, your attorney will write you a check for the remainder. At this point, the check is like any other check and can be deposited at your convenience.