How Much Does a Child Receive From a Birth Injury Lawsuit Settlement?

One of the questions we get most often from are clients is ‘How much money will my child get for their care and medical expenses?’ There’s no ‘average’ sum of how much a settlement or verdict will be, so each case differs. However, there are a few common themes that parents of children with birth injuries should be aware of.

When you hear about large settlements and verdicts, not all of the money goes directly to the family. Lawyer’s fees and lawsuit expenses are involved, and insurance companies that paid for the child’s care will demand to be paid back for the care they provided your child. This is standard in all birth injury cases, which is why parents need to know that many of the numbers they see on other attorney’s websites may be inflated – they only list the total payout before expenses, attorney fees, and medical liens are taken out, which doesn’t accurately reflect how much the families receive.

At ABC Law Centers, we seek to be honest and transparent, and want to provide families with the most accurate picture of our settlement values. Unlike other sites, we publish both the total settlement amount and the value of the annuity that a family may recover for the care of their child.

What Considerations Change How Much Money My Child Will Get From a Settlement or Verdict?

There are several categories of fees that are deducted from a settlement or verdict and that will make a final payout smaller. These include attorney’s fees, expenses from the process of preparing the case, and medical bills/medical liens.

Attorney’s Fees

Attorney’s fees are one of the easier sums to calculate, because they are always clearly spelled out in the retainer agreements that the client receives when they first decide to hire a lawyer for their work. These fees are usually phrased in terms of a total percentage of the recovery (for example, 33% of the total recovery), and can sometimes be different if a case settles before or after the claim is filed.

Client Expenses

These can vary quite significantly, but, with our firm, we front all client expenses (and eat the cost if you lose). We only get these costs reimbursed back when we make a recovery in your case. This means that you never pay up-front out-of-pocket for any expenses.

While it’s difficult to know exactly how much costs will be, the best way to figure out an estimate is to have a clear and open line of communication with your attorneys about your case. Costs typically are lower if the case settles before the claim is taken to trial. At ABC Law Centers, we front all the expenses, and our clients do not have to pay anything if we do not succeed in gaining a recovery. Simply put, we bear the risk on all expenses should we be unsuccessful in obtaining a recovery on the case.

Medical Bills and Medical Liens

The last significant expense that clients must keep in mind is medical liens. Medical bills are pretty simple: if your child gets medical care because of a care provider’s negligence, the expenses insurance paid for that care must be paid back out of any recovery from a lawsuit.  There are federal and state laws that allow medical insurers to place a lien on any medical malpractice case where they have paid for care that was provided as a result of negligence.

Structuring the Proceeds of a Settlement or Verdict to Preserve Existing Benefits

Because a child with a birth injury may need specialized care and governmental assistance throughout their life, the funds received from a settlement or verdict can be structured in a way that doesn’t jeopardize the benefits they might receive. Your attorneys will work with a life care planner and economist to figure out what your child’s needs will be, and the funds may be put into a trust that supplements any existing benefits, such as Medicaid and social security funds (among others). Any recovery must be structured to provide for your child’s future care, and therefore, must be carefully managed so they last for the entirety of your child’s life.  If your child is receiving any government or public benefits, you should consult an attorney in regard to how your child’s future will be secured in light of any recovery from a lawsuit.

Structured Settlement – Annuities

In many cases, families may choose to agree to a structured settlement or annuity.  This annuity invests a large portion of the recovery and will pay out a certain sum of money at regularly-scheduled intervals into the future. The opposite of using an annuity would be a lump sum.

Special Needs Trusts

A special needs trust is a mechanism that serves two purposes:

  • It prevents the money received in the settlement from being mismanaged
  • It ensures that the money is properly and conservatively invested to allow it to grow for your child’s care

Special needs trusts are often advantageous to your child as they allow your child to continue receiving benefits such as Supplemental Security Income (SSI) or Medicaid while having money available to cover expenses that the government benefits don’t cover.  The funds are overseen and disbursed by the trustee.  The trustee typically also must make periodic accountings to the court to ensure that the trust funds are being appropriately managed.

How Does ABC Law Centers Present Their Settlement and Verdict Data?

In our ‘Settlements and Verdicts’ Section, we have two sums listed for your review. The first sum is the total value of the settlement or verdict plus the expected yield of the annuity chosen. This is the maximum value of settlement or verdict, because it takes into account the value of the annuity as it increases over time. The second value is the total value of the settlement or verdict (which includes the cost of the annuity, costs and attorney fees, medical liens, and the value put into a special needs trust).