Personal Injury

Personal Injury: 5 Reasons Why Your NY Injury Lawyer Will Lose His License

1. He steals your money.

2. He steals your money.

3. He steals your money.

4. He steals your money.

5. He steals your money.

OK, enough sarcasm. But really, the main reason a lawyer in New York will lose their license is if they do not give you the money you were to receive as part of a settlement or a jury award.

In a settlement, the insurance company makes the settlement check payable to both you and your lawyer. The lawyer is supposed to have you come into the office to sign (also called endorsing the check). Many lawyers try to avoid having the client come into the office just to sign the check. It's an inconvenience for many clients, and most agree to have the attorney sign their name to the check.

In years past, many lawyers took their client's oral authorization to sign their name to the settlement check. However, the better practice is to get written permission from the client which authorizes the lawyer to sign their name to the check when it comes in. This way the client will have a difficult time saying that they never gave their lawyer permission to sign the check for them.

OK, so what happens then? The check must be deposited into a special "Trust" account, called an "Escrow" account. The check must then clear. Once it has cleared, the lawyer is OBLIGATED to give the client his (or her) money. From the escrow account the lawyer will usually write three checks:

(1) A reimbursement check to his law firm for attorney expenses (known as disbursements),

(2) A check for the earned attorney fee, and

(3) A check to you for your net settlement award.

There are many times when medical bills must be paid, or medicaid or medicare must be reimbursed as well. Those payments will usually come out of your share, since they relate to your medical care and treatment.

We have all heard about attorneys who steal money from their clients, and wind up losing their license, but also going to jail. How does this happen?

Without going into the motivation for a lawyer to do something so unethical, one of two things will usually trigger the starting point of an investigation:

(1) The lawyer only gives you part of your settlement, and then gives an excuse as to why he can't give you the full amount. That may cause the client to file a complaint with the grievance committee, which then starts to investigate.

(2) The other reason is that if a lawyer writes a check payable to 'cash' from an escrow account, this will send up a red warning flag that something is amiss. Also, if the lawyer overdraws money from his trust account, an automatic warning signal is sent to the grievance committee triggering an investigation.

If a lawyer uses some of your settlement money and puts it into his personal account to pay his bills, (this is known as 'co-mingling' money) there is an excellent chance your lawyer is on the way to lose his (or her) license.

Thankfully, this does not happen often. When it does, there is a fund available for the client to seek the money that was stolen from them by their lawyer. It's called the Client Protection Fund. Every lawyer in New York State pays into it as a way to offset the bad apples from the good ones. Hopefully you will never suffer the indignity of having a lawyer steal your money, especially when that lawyer is required by law, and by legal ethics to hold your money in trust for you. It's your injury. It's your compensation.

From NY Medical Malpractice posted 2007-11-26.