When Your Attorney Will Not Release the Settlement Check

Attorney Answer

Settlement money that belongs to you is yours, and an attorney holding it has to account for it and pay over what is not legitimately in dispute. What you are entitled to right now, today, is a written accounting.

There are ordinary reasons a check does not reach a client the week a case settles, and it is worth knowing them before assuming the worst.

The insurer will not normally issue payment until a signed release is in hand. Cal. Civ. Code § 1541 provides: "An obligation is extinguished by a release therefrom given to the debtor or the released party by the creditor or releasing party, upon a new consideration, or in writing, with or without new consideration." The release is what the insurer is buying, so the paperwork usually has to be signed and returned before the draft is issued, and the check then has to be deposited and clear before anything can be paid out.

Liens are the other common reason. Medical providers who treated on credit, health plans, and government programs may have to be paid from the proceeds before the client's share is calculated. If Medi-Cal paid for any of the treatment, Cal. Welf. & Inst. Code § 14124.71(a) applies: when benefits are provided to a beneficiary because of an injury for which another party is liable, the director has a right to recover from that party or carrier the reasonable value of the benefits provided. Sorting out and negotiating those amounts takes time, and it reduces your net rather than killing the claim.

What does not have to wait is information. The line between a normal delay and a real problem is whether your attorney will tell you, in writing, what came in and where it stands. If the answer to a written request is silence, that is the point at which this stops being a timing question.

What you can do

1. Ask your attorney in writing for a settlement statement showing the gross amount received, the fee, each cost itemized, every lien and its current amount, your net, and a date by which you will be paid.

2. Ask in the same letter which liens are unresolved, who is negotiating them, and whether the release has been signed and the funds have cleared.

3. Keep copies of everything you send and note the date you sent it.

4. If the disagreement is really about the fee, ask your county bar association about its fee arbitration program.

5. If the attorney will not account for the money at all, you can file a complaint with the State Bar of California, which regulates attorney trust accounts and also administers a fund that reimburses clients for money a lawyer took wrongfully.

6. Take the fee agreement and any settlement statement to a different local attorney for a second look before you sign anything else.

Most lawyers offer a brief initial call at no cost, and a few minutes on your specific facts with someone licensed in California is worth more than any general guidance, including this page.

⏱ Time limits apply. If this turns into a claim against the attorney rather than a delay, Cal. Code Civ. Proc. § 340.6(a) controls: an action against an attorney for a wrongful act or omission, other than actual fraud, must be commenced within one year after you discover, or with reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or within four years of the act itself, whichever comes first. That is shorter than most people expect and it can start running while you are still waiting and asking. Have a local attorney look at the dates now rather than after another round of unanswered calls.