Lawsuit settlements are a common output of the legal process.
Maybe your lawsuit is a personal injury case, fraudulent actions case or defamation of character lawsuit.
Maybe you are involved in an employment related dispute, product liability case, negligence lawsuit, or wrongful death lawsuit.
No matter what the case type, lawsuit settlements are relevant to you because most cases will settle long before they are resolved through the court system.
In this article, we answer some of the most frequently asked questions regarding lawsuit settlements.
How Much Will My Lawsuit Settle For?
This is probably the first question most people ask their attorneys.
It comes in a variety of forms: How much is my case worth? How much money will I get from my lawsuit? Is it worth it for me to sue?
The common denominator is that everyone would love to know in advance how much they will get from suing somebody.
Unfortunately, every lawsuit is different and lawsuit settlements are almost always heavily based on the specifics pertaining to a given lawsuit. Common lawsuit settlement amounts are known to the attorneys involved with the various lawsuit case types. So, the best way to assess the value of a lawsuit is to ask your attorney.
Unless they have psychic powers, your attorney cannot predict the exact amount of your lawsuit settlement, but they should be able to provide a range of possible lawsuit settlement amounts and give you some examples of recent lawsuit settlements for similar cases.
Who Will Decide My Case Settlement Amount?
While there is such a thing as an in-court lawsuit settlement, the vast majority of lawsuit settlements are defined out of court, through the interactions of the parties involved in a lawsuit along with their legal counsel.
When a case settlement is arrived at in court, it is determined by a judge or jury.
Are Legal Settlements Taxable?
As with most tax questions, the answer is not simple. There is a common perception that lawsuit settlements are not taxable, but this is absolutely not the case.
It all depends on the specifics of the settlement. For example, whereas certain compensatory damages for physical injuries may not be taxable, any punitive damages awarded as part of the settlement may be taxable.
Determining which parts of a lawsuit settlement represent taxable payments and which represent non-taxable payments is something that requires the services of a good, experience accountant or tax advisor. Prior to accepting a lawsuit settlement, you should fully understand what your tax obligations will be because this may impact your lawsuit settlement negotiations.
Are Lawsuit Settlements Confidential?
Lawsuit settlement agreements usually include a confidentiality provision that ensures that lawsuit settlement terms will be confidential and not available to the public. As part of the settlement, the involved parties all agree that they will not disclose the terms of the settlement agreement.
However, if a judge or jury defines the lawsuit settlement terms, this is often a matter of public record and settlement amount information and settlement terms information may be available via court records. In many cases, though, even when a judge is involved, there may be a confidential settlement agreement.