New Jersey Lawyers BlogRequirements Before Settlement Funds May Be Disbursed
Litigation can often be a long and painstaking process resulting in two parties who ultimately just want to see the dispute come to an end, and hopefully with a resolution that they are satisfied with. Indeed, perhaps as high as 97 percent of cases are resolved before trial. However, once a case is settled, the time between an initial agreement to settle and an injured party receiving money is almost never instantaneous.
First the attorneys must draft settlement documents. Depending on the complexity of the case, this can be anywhere from a page long to over thirty pages, and the exact language is important. While a plaintiff may not understand why her attorney is fighting with the defense attorney over what she may think trivial, the settlement agreement becomes a contract that will ultimately decide the entire resolution of the case and, in many cases, direct the parties’ actions in the future. Failure to adhere to the settlement agreement’s terms could lead to the case being reopened, a new action being brought, or a forfeiture of everything gained in the settlement. Therefore the specific language is essential to the parties’ security and the integrity and power of the settlement agreement itself.
Once the language of the settlement agreement is finalized and the parties all sign off on their agreement, assuming that the settlement results in one party paying money to another, there will likely be a waiting period for the funds to be delivered. However, even if the money is delivered to the injured party’s attorney immediately, the attorney cannot immediately release the money. The attorney must first ensure that the amount being forwarded to the client is correct and is being legally distributed.
Depending on the type of case, the attorney may be required to reimburse the New Jersey Department of Human Services, Division of Medical Assistance and Health Services (“DMAHS”) for any funds that Medicaid or Medicare have paid on the person’s behalf. The amount that the client has to pay to her attorney typically reduces the amount that needs to be repaid to DMAHS out of any particular settlement
Additionally, the attorney must run a search on the settlement recipient’s history, including whether or not the recipient owes any child support. This is because, by law, a judgment for outstanding child support becomes a lien against the proceeds of any settlement. Before distributing any money to the settlement recipient, the attorney must obtain a certification from the client including her name, mailing address, date of birth, and social security number to allow the attorney to conduct a search of child support judgments. If a child support judgment is listed, the attorney or client must pay such out of the settlement funds and obtain a warrant of satisfaction before any remaining funds can be disbursed.
Additionally, the attorney must conduct a patriot search, also known as a search for specially designated nationals and blocked persons. This is a list maintained by the United States government, specifically the Office of Foreign Assets Control (“OFAC”), including individuals and entities such as terrorist organizations and drug traffickers. These individuals and entities’ assets are blocks and U.S. citizens are generally prohibited from dealing with him. While actually finding a matching listing when conducting a patriot search is odd, even if it does occur, it could merely be for someone with a similar name or otherwise constitute an error. However, this further delays the settlement process as the attorney is required to contact OFAC for verification.
The attorneys at McLaughlin & Nardi are experienced with drafting and negotiating settlement agreements and contracts. To learn more about what we can do to help, please visit our website or contact one of our lawyers at (973) 890-0004.