It’s not everyday that a person settles their personal injury case. Getting your money from a personal injury settlement is a completely new process which you haven’t experienced, and thus, likely don’t understand.
The settlement money does not magically appear in your bank account the moment after your case settles. If you attend at your lawyer’s office, the money does not magically appear either. There are still a few steps which need to be done. Those steps take place behind the scenes, and, for the most part, they are completely out of your control; and out of the control of your personal injury lawyer. But, understanding those steps might bring you a bit of peace of mind and will help you remain patient while you wait for the settlement funds to become available.
If you’ve made a deal with the insurance company with the help of your personal injury lawyer, the one thing you can do to move things forward is to sign the Release. If you don’t sign the Release, then the deal is not finalized and the insurance company will not requisition the cheque from their accounting department.
When a personal injury case settles, the Defendant/Insurer will require the Plaintiff to sign a Release. This is standard. Anyone who settles their case outside of Court will need to sign a Release. It will say in legalese that the case has settled for a specified amount; that the Plaintiff will NOT sue again over that specific accident/injury; and that the Plaintiff will not share the fact that the case settled all over town (a confidentiality clause is sometimes there, sometimes not). The faster which a Plaintiff signs the Release, the faster the settlement funds will be requisitioned by the insurance company.
Once the Release is signed, if all goes well, the insurer will request that their accounting department prepare a cheque. That cheque is then sent to your personal injury lawyer; and deposited into his/her trust account. The settlement funds stay in the trust account until they have cleared. I have not seen an insurance company bounce a cheque. But, I have seen self represented Defendants (individual and corporate) bounce settlement cheques. I have also seen settlement fund scams but these have not involved insurers. Rather, they’ve involved self represented defendants (individual or corporate shell companies).
Once the settlement funds have cleared, you will be able to collect the settlement funds from your personal injury lawyer.
If you get a settlement cheque from your personal injury lawyer; chances are your bank will put a hold on the cheque (sometimes even if the funds have been certified). If the funds have been certified, then the holding period will be shorter. Even though the settlement funds are drawn from a lawyer’s trust account, the bank will still likely place a hold on them. It just depends on the bank and your relationship with that bank. It’s not everyday that someone deposits such a large amount into their personal account. The bank wants to make sure that the cheque is legit. You can’t fault them for that. But, we understand that the wait time can be frustrating because you just want access to your settlement funds. But you can’t spend what you don’t yet have, so remain patient until the funds are available
Here are a few things which happen behind the scenes, which you would not expect to occur:
The Insurance Defence Lawyer or the adjuster on the file either forgets to make the requisition for the cheque; or there is some sort of miscommunication between the lawyer and the accounting department and the cheque doesn’t get processed resulting in a delay in your lawyer receiving the settlement funds.
The cheque gets lost or rerouted in the mail or in transit from the insurance company to their lawyer; or to your personal injury lawyer. Perhaps the wrong address was used and the mail monster gets it; only to never be seen again. How about the cheque getting lost due to a Canada Post strike? How about a private courier company losing the package. All of this happens more often than you might expect.
The settlement funds arrive, but they are in the wrong amount (usually short the required settlement amount). New funds need to be requested, which causes delay in the Plaintiff receiving his/her settlement funds.
The case settles for $100,000; but the settlement funds are arriving from multiple insurance companies. The more insurance companies or Defendants who are contributing to the settlement, the messier or more complicated it can get. $10,000 from one party, a few thousand from another. Some cheques arrive quickly, others don’t. And there’s usually one party which is really slow at getting the funds. The personal injury lawyer also has to ensure that each cheque has cleared so it could take a while.
If the settlement funds are coming from overseas (like a European insurer), it will take more time. It shouldn’t. But it does. It takes a lot more time in our experience for settlement funds to arrive where the person who’s calling the shots and writing the cheques is based out of Europe. The distance shouldn’t matter in today’s day and age, but it seems to play a factor. Settlement funds which arrive from a Canadian insurer; particularly with an office in Ontario; will arrive faster than settlement funds from an international insurer. This is completely outside of the Plaintiff’s control. S/he cannot control who the at fault party is; and where they’re based out of. This just boils down to luck and circumstance.
When your settlement funds do arrive, your bank will 9.9 times out of 10 hold those settlement funds until they clear; or until the bank manager calls your personal injury lawyer to verify that the funds are authentic. They want to make sure this is not part of some elaborate scam or fraudulent banking scheme. That’s ok. They’re doing their due diligence, as they ought to. It’s their job. So, don’t be surprised when banks do this, even if your settlement funds are certified. Banks will err on the side of caution.