Articles Tagged with Personal Injury

Whatever you think about President Trump, it is undeniable that he has kept his campaign promise to stringently – and, in many cases, cruelly – enforce the immigration laws of the United States of America.  Though he has not successfully put forth any significant immigration legislation in Congress, he has stepped up – to a seemingly-exponential degree – enforcement of existing laws and rules, and has also signed several Executive Orders directing immigration officials and agents of the Immigration and Customs Enforcement Agency (known as “ICE”) to increase efforts to find and deport hard-working, law-abiding, though undocumented immigrants.  In following the President’s orders, ICE has undertaken extremely-unsavory – nay, un-American – tactics in an effort to catch, process and deport undocumented immigrants in New York and all over the United States.

Among these distasteful methods of furthering President Trump’s agenda to deport more undocumented immigrants involves conducting raids and searches at courthouses across New York State, catching undocumented immigrants as they attempt to comply with our laws, respond to legal process, or seek justice to which they are entitled.  This tactic deprives the undocumented from vindicating their legal rights – yes, the undocumented do have a substantial number of legal rights and do have access to our courts – and puts the undocumented at risk of suffering inhuman and un-American abuses without the possibility of the legal recourse to which they are entitled.

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According to just about every television show or Hollywood movie ever made about a legal case of any kind (including personal injury cases), once a jury returns a verdict in favor of one party or another, the case is over.  Many a famed courtroom drama has ended just after the jury delivers its verdict, with the final scene often depicting a cathartic and celebratory scene on the courthouse steps between the victorious lawyer and his or her clients.  However, in this regard (as in many others), cinematic depictions of legal cases of all sorts are, to phrase it generously, inaccurate.  In a real personal injury or medical malpractice lawsuit, a jury verdict in favor of an injured plaintiff is very often not the end of the case.  This is because, under the court systems of every state across the United States, including the Federal Courts of the United States, the losing party at trial has the right to “appeal” various aspects of a jury verdict against them to a higher court and request that the jury verdict be overturned.  The post-verdict appeal process is extremely complicated, and to address all of the salient aspects of this process would require authorship of a textbook, rather than a blog post.  In this article, we explore some very basic concepts pertaining to the post-verdict appeals process as applied to personal injury and medical malpractice cases in the state court system in New York.  The reader is encouraged to take the following lesson from this article:  The jury verdict is not the end of the story, as the appeals process is expensive and fraught with risk; thus, if possible, it is usually advisable to attempt to obtain a final settlement of a New York personal injury or medical malpractice lawsuit (settlements cannot be appealed in almost every circumstance), rather than proceed through a jury verdict and an appeal.

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This article is the second of two parts of our series on the taxability of personal injury and medical malpractice settlements and verdicts for residents of New York State.  We hope that you enjoy reading it, and invite you to contact us with any questions you may have by calling (718) 354-8000 today.

The General Theory: Personal Injury and Medical Malpractice Settlements and Judgments are Not Income and Thus are Not Taxable.

When a person suffers a serious injury, they experience a loss that is referred to as “damages” under the personal injury laws. This loss, in a personal injury lawsuit, is categorized into different elements, which can include pain and suffering, lost wages (both past and future), medical bills (both past and future), as well as other categories of damages that may arise depending upon the circumstances of the particular case. When a jury awards damages to an injured plaintiff in a personal injury lawsuit, the jury is, essentially, giving the plaintiff money to compensate them for what they have lost due to having been injured. This concept is the same when a personal injury plaintiff receives a settlement for the damages they have incurred.

If a personal injury case brought in New York State is successful, the injured person (and also members of their family, under certain circumstances) will receive financial compensation for their injuries, which can sometimes be a substantial amount of money. After all, under our system of civil laws that apply to such cases, financial compensation is essentially the only remedy available for injured people if they suffer physical harm due to the negligence of another.   For many seriously injured people, the amount of money awarded is far more money than they have ever had at any one time in their entire life.

Imagine that you have received a very substantial settlement in a construction accident case (say, for example, you had fallen off a scaffold on a construction site, and had suffered very serious injuries to your spine which required surgery and which left you unable to perform construction work for the rest of your life) in which you were compensated for your pain and suffering (that is to say, for your actual physical injuries, as well as the psychological injuries caused by your accident and resultant disability), your lost wages, and your lost union benefits (such as your pension, medical insurance and vacation time). Upon feeling gratified in receiving compensation that is rightfully yours, the next thought is very likely to be: “Do I now have to pay a massive tax bill because I have been compensated for my injuries? After all, when I used to be able to work, and I earned a paycheck and benefits, I had to pay taxes on those things, so why wouldn’t I have to pay taxes on the money I have received from my case?”

The answer to this question for residents of New York State, thankfully, is usually “no”. As a general rule, proceeds of cases in which you are compensated for the consequences of physical injuries are not taxed. This is because, as a general matter (and in very simplistic terms), only “profits” are considered income that can be taxed, and any recovery had in a personal injury lawsuit is not considered to be profit but is simply a repayment of money that was taken away from the injured person due to the negligent conduct of another person.

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