What Happens in Colorado When You Win Your Personal Injury Lawsuit?

What Happens in Colorado

At Colorado’s District Court level in 2017, there were 215,369 case filings and the largest single class of case filings was civil (37%). This means that almost 80,000 new civil cases, most of which seek damages of over $15,000, entered this system. The vast majority of personal injury cases conclude by reaching a settlement agreement, which outlines the recovery the plaintiff is entitled to. The court issues an order of settlement once all parties have the paperwork completed and submitted. Prior to receiving an award, you are required to sign a formal document to make things official with the insurance company. It should come as no surprise that court cases often take time and to finally prevail in a civil case can be gratifying.

Release & Confidentiality Agreements

The provisions of the agreement will vary based on your case; however, they typically contain language that effectively releases the defendants from any further claims relating to the specific matter. After this is completed, the insurer may issue the settlement funds to your attorney. These documents are contracts that list the terms of the settlement that the court may enforce. In addition to releasing the opposing party from any further actions, they also may require that the terms of the settlement be confidential.

Tax Considerations

The IRS generally considers personal injury awards as non-taxable. This includes compensation related to physical injuries, physical sickness, emotional distress, and property damage. Compensation that is not classified under these four areas would be taxable, and it would include any award of punitive damages.

Medical Bills

Prior to receiving your check, your attorney may pay any of your outstanding medical bills from the incident. If Medicaid or Medicare paid your claim-related medical costs, the government may seek reimbursement. The Colorado Department of Health Care Policy & Financing has a Tort and Casualty Unit that pursues reimbursement for Health First Colorado, the state’s Medicaid program. Health First Colorado may have an automatic lien according to the statute. This is known as subrogation, which is designed so parties are not paid twice for the same damage.

Costs & Fees

Your personal injury attorney will typically place settlement funds into a trust account. Attorney fees will be deducted as outlined in the contingency agreement, as well as other expenses the attorney incurred during the cases. Judgment orders may contain provisions specifying anyone who is entitled to costs. Unless specified differently, the court clerk may tax costs for the benefit of the party that prevails. An example would be in response to a motion for attorney fees and costs of litigation.


In a settlement, the plaintiff is usually eligible for interest that has compounded since the action began. The Secretary of State is responsible for reviewing and certifying the rate annually. Interest is generally a taxable portion of a settlement.

Collecting a Civil Judgment

What if the losing party does not pay? The party owed an award is referred to as the judgment creditor and the owing party is the judgment debtor. Judgments ordered in a county venue run for six years and twenty years in district venues. Initially, your attorney may formally request payment from the party prior to seeking court assistance. The first step may be to collect relevant data about the party such as information regarding employment, banking, or property owned. Common ways of collecting include garnishment of wages or placing a lien on the property.

Potential Appeal

A case that ends with a trial may be appealed. An appeal is a potential trial outcome that can be complex. A party seeking an appeal must file within 45 days following a civil judgment. If multiple parties wish to appeal, they must be filed individually.

In the aftermath of a serious injury that results from an accident, the injury victim may be confused and anxious about what to do next. In these instances, it is critical to avoid accepting an initial offer to settle from the liable party’s insurance carrier, as these offers may be insufficient. A personal injury attorney has the experience to accurately assess the value of a claim and has familiarity with insurance company tactics so that you are treated fairly.

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Put my knowledge and expertise to work for you. Contact my office today to discuss your case in a free consultation.