Frequently Asked Questions
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What is social media surveillance in a personal injury case?
In today’s society, millions and millions of people post all kinds of personal information on their social media pages. Photographs, check-ins, statuses all show up on Facebook, Instagram, Twitter, and more. But an insurance company can use all of your social media posts against you in order to try to prove your claim is invalid. Even if you have all of your accounts set to private, the insurance company can file a motion with the courts to have you turn over this information as evidence.
What is video surveillance in a personal injury case?
It is not uncommon for an insurance company to utilize the services of investigators to follow and watch a victim while they go through their day to day activities. The investigator will usually video record or take photos of any activity they think could be used to prove the victim is not really injured as they claim they are. This evidence can all be presented during litigation as evidence against the victim. However, the victim’s attorney can also use the recordings to prove the victim is injured and can request all videos and photos during the discovery phase of litigation.
Is it legal for an insurance investigator to “spy” on a victim while their claim is pending?
It is legal and it is also likely, especially if the amount of the claim is a significant amount. As long as the investigator is not infringing on your privacy, then it is legal. In order to avoid any issues that could jeopardize your claim, it is important to always be honest about your injury. Do not exaggerate the extent of injuries, but also do not push yourself to do things your body is not physically ready to do, such as go back to work too soon or work on household chores.
How are the income taxes determined when the punitive damages are included in a settlement amount and not an award?
In order to avoid paying the government more in punitive damage tax than you should, it is critical that the settlement agreement your accident attorney draws up is specific in what dollar amount – if any – is specifically dedicated for punitive damages. Otherwise, the IRS could turn around and make that determination and the amount could be much more than what was actually intended to be punitive damages.
How are taxes determined for the punitive amount of a personal injury award?
The economic and non-economic damages a victim received in a personal injury award are not taxable, however, if punitive damages are awarded, those are taxable under the federal tax code. However, before the tax is determined on that amount, the victim is allowed to deduct the attorney’s fees related to that punitive damage amount first. In the majority of personal injury cases, attorneys work on a contingency basis, meaning they don’t get paid unless they are successful in getting financial compensation for the victim. Typically, the fee is one-third of the amount the victim is awarded.
Is a personal injury award taxable?
According to the federal income code, any damages received for personal physical injury or illness is not to be included in a taxpayer’s gross income, making that settlement or award exempt from federal taxes. Each state in the country also follows this rule. However, punitive damages are not included in this rule and any punitive damages awarded are taxable.
How are settlements paid?
The majority of settlements are paid in one lump sum with a month or two after the settlement is reached. In some cases, the victim may choose to receive a structured settlement where the money is paid to them over a period of time.
How will proceeds of the settlement be paid?
In the majority of personal injury lawsuits, the attorney is working for the victim on a contingency basis. This means the attorney only gets paid if they are successful in obtaining a settlement or award for the victim. This contingency amount is agreed to before the attorney agrees to take the case. Generally, the attorney is paid a percentage of the total amount of the settlement or award. The attorney is also reimbursed for any advanced costs they covered for the case, such as court fees or expert witness testimony fees. If there are any liens against the settlement – such as reimbursement requests from medical insurance companies or providers – those parties will receive their fees. The amount left over is paid directly to the victim.
Who decides a personal injury settlement amount?
The final decision is made by the parties involved in the lawsuit, guided by the legal advice of their attorneys. When an insurance company is involved, then that company is also involved in the decision. In more complex cases, there may be a mediator or settlement conference judge involved in negotiations.
How are settlement offers made?
There are many ways a settlement offer can be agreed to. If the parties are in active negotiations, there is likely an ongoing communication exchange taking place, with phone calls, emails, and letters between the victim’s attorney and the at-fault party’s attorney and/or insurance company. There may also be formal settlement conferences or mediation where the agreement can be reached. In situations where the lawsuit has reached trial, the agreement may be reached right outside the courtroom before or during the trial.