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Articles Posted in Settlements

ladywithdollarbillI just read an article in the New York Times about a woman charged with stealing her 11-year-old daughter’s medical malpractice settlement to pay for liposuction, a “tummy tuck” procedure, online shopping, plane tickets, restaurant bills – you name it. She was using her child’s settlement money like her own private piggy bank!

The settlement was for medical malpractice that had left the child with severe, lifelong limitations in the use of her right arm.  The settlement was “structured” so that the victim would get payments every five years or so starting at age 18. She’ll need the money because of her severe income limitations! (We at Michaels & Smolak have set up countless structured settlements like this one for injured children.)

But some $67,000 of the money was placed in a judicially protected savings account. Such a court-approved account is set up for the child to access – with accrued interest — when she turns 18. A parent can withdraw money from the account on behalf of the child before the child turns 18, but only for important educational or medical needs of a child, and only with a court order. To access the money on behalf of her child, a parent would normally seek the judge’s approval, and then present a signed court order to the bank to make whatever withdrawals the judge has approved. (We at Michaels & Smolak have also set up countless court-protected bank accounts like this one for injured children).

thSeal of the State of New York

Here is a letter I recently wrote to a client who suffered a serious injury caused by the negligence of the State of New York.  I’ll call my client “Joe”, though that’s not his real name:

Dear Joe:

jury verdictHere at Michaels & Smolak, on any given day, you are likely to find, on our attorneys’ desks, piles of dog-eared, highlighted, and marked-up volumes of the New York Jury Verdict Reporter. The Reporter summarizes jury verdicts on a weekly basis from around New York State. (Actually, this publication is now called “VerdictSearch“, but old-timers like me, and most New York personal injury lawyers, still call it the “Jury Verdict Reporter“.)

Why do we read it?  To help us represent YOU in YOUR CASE.  True, every case is different, including yours, so the New York Jury Verdict Reporter provides only limited guidance.  Every case, including yours, has a unique set of facts, lawyers, and jury members. All of these variables can and do affect the result of a case. Therefore, in one sense, the result of a single case reported in the Jury Verdict Reporter literally tells us nothing about how your case will end up.

But if you keep reading the jury verdict reports week after week, as we do, certain patterns emerge that are very helpful to both predicting the result of, and guiding our handling of, your case. Here are five main lessons that come out of the jury verdict reporter:

2010-thumb-250x171New York personal injury lawyers like me get this question all the time. The answer is complex, but explaining complex things to judges, juries and clients, is what we do for a living. We are essentially in the “communication” business. So here goes:

  1. Most often it is not a good idea to settle your claim until you are done treating or at least until your doctor can render an opinion on what – if any – permanent injuries you have. This often takes a year or longer. Insurance adjusters won’t give you anything for “permanent” injuries until your medical records make it clear that they are permanent. This can usually happen only a year or longer after your injury, or even longer if the injuries are very serious.
  2. If the insurance adjuster is disputing “liability”, that is, he or she says  the defendant was not at fault, or that the accident was partially your fault, the case may take longer. We may need to sue.  Only by suing can we take depositions.  Once we nail down the defendant’s and witnesses’ sworn testimony at deposition, we can show the insurance adjuster the accident was all defendant’s fault.  If there is still a dispute about liability after depositions, we may have to go to trial to prove we are right. This judicial process takes months or even years!

money.jpgA first offer from an insurance adjuster is like the first kiss on a date: It usually leads to something more substantial. At least that’s my experience (recently in law, and a long time ago in dating). Yes, I have plenty of recent experience (more than 20 years) in New York personal injury law.

When you are hurt because of someone else’s negligence, you are likely to get a call from an insurance adjuster fairly soon. He or she will offer you money to settle. It probably won’t be enough. My advice? Think of it as a first date. If you simply take that offer, and sign a “release”, and say goodbye, you’ll never find out what would have happened on the second date.

As Nancy Reagan used to say, “just say no”! Don’t worry about the offer evaporating. As a New York personal injury lawyer with many years’ experience, I have never seen that first offer “disappear”. I have never even seen and insurance adjuster LOWER an offer, much less take it off the table. And I have seen many, many times, indeed most times, insurance adjusters INCREASE their offer.

mill.jpgI came across a Stanford law professor’s study on the effect of “settlement mill” type personal injury law firms on personal injury case settlement results. If you’re searching for a New York personal injury lawyer, it’s worth a read! But since you probably won’t read it (it is 63 pages long!) let me summarize it for you.

Before I go any further, I’d better explain what we mean by “settlement mill”.

In the words of the law professor who did the study, a “settlement mill” is a “high-volume personal injury law firm that aggressively advertises and mass produces the resolution of claims, typically with little client interaction and without initiating lawsuits, much less taking claims to trial”.

money.jpg“How Much Is My Case Worth”?

I have heard this question thousands of times. And there is no easy answer. That’s because so many factors affect the “value” of a case. What do we mean by “value” anyway?

The settlement value of a case is based on a prediction of whether a jury will find you have a valid case, and if so, what the jury will award you for your injury. Since juries vary widely, and it is impossible to predict what any particular jury will do, we consider what an average jury would do.

medical records.jpgDoctors, nurses, physicians’ assistants and other medical providers are not always good listeners. I know this from personal experience, but also because they frequently misquote my clients in their medical records.

For example, I once had a client who tripped on a broken-up walkway on the way into a store and suffered a serious knee injury. But the emergency room record said that the patient had “slipped and fell” and injured his knee.

“Slipped”, “tripped”, what’s the difference, right? For the doctor, none. For me, the difference was crucial. The doctor made this mistake because it didn’t matter to him how the plaintiff came to fall; for the purposes of diagnosing and treating the patient, his or her only concern was that he fell, and what part of his body he landed on. So he was only half listening when the patient told him how he ended up falling. He was more interested in learning what part of the knee hit the concrete, where it hurt, and whether the patient had mobility there.

line in sand.jpgPresident Obama reportedly told Syria, in sum or substance, “if you use chemical weapons on your people, we will use punish you militarily”.

Then Syria used chemical weapons on its people. But instead of inflicting military damage on Damascus, as promised, Obama hemmed, hawed, asked his allies what they thought, asked Congress what it thought, etc.

So what happens the next time the U.S. says to a dictator, “if you do x, we will do y”? What does an empty threat do to our credibility for future negotiations?

Thumbnail image for money.jpgTax season, which is now upon us, is, for most people, about as fun as sticking a fork in your eye. But your Central New York personal injury lawyer brings good tax news for personal injury victims! You’ve all heard the refrain, “nothing is certain except death and taxes”. That’s definitely true for death, but not always so for taxes, at least not for personal injury victims. Let me explain.

Many of my injured clients are pleasantly surprised to learn they don’t have to pay income tax on their personal injury settlements. This is because compensation for pain and suffering is not considered “income” but rather money to replace a loss suffered. In other words, the loss + settlement = a net wash, i.e., no income earned.

Another thing our clients are sometimes surprised to learn is that they can avoid paying tax even on interest they earn on their settlement money. How? Well, If you take the money in a lump sum (cash), and place it in the bank, and earn interest on it, you must pay a capital gains tax on the interest earned. But if you instead take a “structured settlement“, you can earn the same or even more interest tax free! Assume, for example, you get a $100,000 net settlement and elect to have it “structured” so that you earn an extra $10,000 on it. The insurance company pays you $10,000 a year for 11 years for a total $110,000 in payments ($10,000 of which corresponds to interest earned). Normally, you have to pay a capital gains tax on interest earned, but not if you earned that interest on a structured settlement! That’s because technically the insurance company that structures your settlement money “owns” the money while it is cooking up the interest (you are not earning it – they are!) and pays you only after the interest is generated. A gimmick, yes, but a legal one that helps you keep all the interest you earned on your settlement money.

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