TIMING YOUR SETTLEMENT FUNDING
Kate Gillespie, an experienced California attorney in the fields of drug product liability cases, class action cases and commercial trucking accident cases, gives a few words of wisdom. We hope her information can enrich your California legal practice.
You did it! You settled your case — big or small it always feels good to get your client not only a positive resolution, but a quick one, too (at least quicker than if you took the case through trial). But, don’t sit back and kick up your heels just yet because your job of reducing your case to that one tiny piece of paper – a check – is not over, in fact, some may say it has just begun.
Settlement of a case is not the end of your case, it is actually the threshold to a slew of interesting questions and negotiations, all dealing with funding that settlement. These items include: negotiation of the timing to fund the settlement, negotiation of the Release Agreement, negotiation of your client’s liens, processing Medicare forms to negotiate the Medicare lien, pursuing probate issues, pursuing settlement approval from the courts, deciding whether a lump sum or structured settlement is better for your client to protect your client’s settlement, and determining what should be done if your client is receiving government aid and the settlement threatens to derail that aid. Whew!
It sounds like a lot and it is a lot. So, obviously, it is important to be prepared to tackle these items immediately. In fact, some of them should be handled in the final negotiation of the settlement. But, as they say “one step at a time, sweet Jesus.” This blog post will focus on one topic: negotiating the time that the defendant has to fund the settlement and including the date in the initial settlement agreement, right there in front of the judge or the mediator or arbitrator. This happens before you get to the nitty-gritty of the Release Agreement.
Recently, there has been a move by the defense bar to extend the time to fund settlements. It used to be standard that settlements funded in 30 days. It wasn’t even an issue. Lately, however, the 30-day window that allowed you to get all of your paperwork together has slowly and consistently been expanded to 45 days, 60 days and even 90 days. What gives? Well some may blame the economy; but I, myself, think the insurance companies have figured out that they can get this liability off its books (technically), but have the money remain in the account and grow interest (which it doesn’t have to pay to your client). Now, I know what you are thinking – interest is not a big deal – but it is a big deal for your client. The client wants to be done with the stress of dealing with their case; and every day that passes after a settlement with the adversary holding the money is a day your client feels stuck. Not to mention the couple hundred bucks they are missing out on in interest (provided they invest the cash).
Back to the issue at hand. If left unchecked, defendants will take as much time as they can to fund a settlement. Don’t let this happen. During your settlement negotiations, demand, at the very least, that the settlement be funded within 30 days. This means that you must agree to finalize the Release Agreement, have it fully executed and returned to defendants within that time. You have to move to get it done, but it is worth it to you and to your client. If nothing else, this demand sends a message that you are focused on securing and finalizing the settlement and will not allow the funding process to drag out indefinitely. So, nail them down to a specific time to fund. Good luck.
Kate Gillespie is an associate attorney at a Los Angeles law firm and focuses her practice on the firm’s drug product liability cases, class action cases and commercial trucking accident cases. Her drug litigation includes cases involving birth defects related to antidepressant use and suicide in patients taking SSRIs.