What Should Be Included in a Settlement Statement?

CosmoLex Team

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Settlement Statement

Once settlement funds are received and deposited into the trust account, a lawyer should always draft a settlement statement. This statement shows the proposed distribution of the funds to cover fees, case expenses and any outstanding payables associated with the matter.

The purpose of the statement is to make it clear to the client how the money is being handled and to provide an audit trail as to the handling of the funds.

The settlement statement should include[1]:

  • The amount of the check
  • Accounts/fees payable to the firm
  • Amount payable to the firm to cover expenses paid for by the firm
  • Amount payable to third parties, such as court reporters and expert witnesses
  • Amount client will receive

Your practice management program should be able to generate a list of all expenses associated with the case. This report should be included with the settlement statement when possible.

Before this money can be taken out of the trust fund and disbursed, the client should review the completed statement. Once reviewed, the statement should be signed by the client and the lawyer.


References

1. Handling Settlement Funds