The Personal Injury Claim

Here is a simple diagram explaining the personal injury claim process.

Accident

a. The client suffers an injury as a result of the defendant’s actions or inactions.

i. In MVA, Police may be called to make a report and/or pics of the accident may be taken.

ii. In Premises, Incident Report may be generated and/or pictures of the hazard may be taken.

Insurance Claim

a. Client (or client’s attorney) calls or emails the defendant’s insurance company to make a personal injury claim and advise them that they are injured as a result of the accident.

b. In MVA, client may also file a claim with their own insurance company via the UIM (Underinsured Motorist) coverage portion of their own policy.

i. UIM coverage is used when the defendant’s policy limits are too low to properly compensate for the accident.

ii. The amount of insurance for the accident is higher than the defendant’s policy and the client’s own UIM policy. THEY DO NOT STACK IN CA!

Treatment

a. Typically, the client will begin medical treatment immediately following the accident.

i. Client may pay for treatment in various ways.

1. Health insurance

2. Auto medical pay

3. Cash Pay (cash price medical funding)

a. Client pays for the treatment out of pocket or uses a funding company to pay for the treatment.

4. Lien Doctors / Facilities (Lien purchase)

a. Medical Provider performs the treatment in exchange for a lien in the settlement proceeds.

b. Paid at settlement, no upfront.

Action Filed Litigation

a. If the personal injury claim cannot be resolved directly with the insurance company, within 2 years after the accident date the client needs to file a formal lawsuit against the defendant in court.

i. Typically filed in the jurisdiction where the accident occurred.

ii. The Complaint sets forth the nature of the case and what the client plans to prove through the litigation process.

iii. Defendant is assigned an attorney picked by the insurance company and the insurance company is responsible for defending the defendant.

b. Litigation (Case Cost Funding)

i. Discovery

1. Discovery is the fact-finding portion of litigation. Both parties in the case request and exchange information, interview witnesses and perform inspections/investigations of the incident in order to find evidence that will help their case.

ii. Motion Practice

1. Both parties draft documents in an attempt to get the judge to decide a specific thing in their favor. Some examples are: keeping certain evidence out of trial, keeping a witness from testifying, deciding the case based on all available facts (Motion for Summary judgment), etc.

iii. Mediation

1. Typically, once discovery is complete the parties will attempt to resolve the claim through mediation. Mediation is when the parties present their cases to a third party and try to come to an agreement on how much the case should be worth. Mediation helps avoid costly trials and is an efficient way to resolve claims.

c. Trial (Case Cost Funding/Trial Funding)

i. Though most cases will settle, a few go all the way to trial. Trial is the formal presentation of the case by the parties in front of a jury and/or judge.

ii. Verdict – The decision made by the jury and/or judge at the conclusion of the trial as to how much the client should be compensated.

d. Post-Trial Motions/Appeals (Appellate Funding)

i. Even after the verdict is rendered, the party who is not satisfied can attempt to change the verdict if there was something that occurred during the litigation and/or trial process that was not proper and affected the outcomes of the case.

e. Distribution

i. Once the verdict is final or the case is settled, the insurance company writes a check to the plaintiff’s law firm and the lawyer is responsible for distributing the money to the interested parties. The funds are distributed in the following order:

1. Attorney Fees (Attorney usually gets 33-45% of total)

2. Costs (costs that attorney spent are reimbursed to attorney)

3. Statutory lienholders (workers comp, child support, disability, etc)

4. Medical lien holders (Medical providers or medical lien buyers)

5. Client and funding companies.