Insurance 101 – Chapter 11 – Volume 55 – Tort Lawyers & Taxes

Tort Lawyers & Taxes

Most tort lawyers, both plaintiff and defendant, are not knowledgeable about tax consequences. Counsel for plaintiffs who are seeking punitive damages should carefully advise their clients of the tax consequences of the recovery of punitive damages if they know enough, or should require that each plaintiff seek the advice of a tax professional before agreeing to proceed with a suit or trial seeking punitive damages. If the Greenbergs had consulted with tax lawyers and been advised that they would be required to pay the top tax rate on the full amount of punitive damages awarded to them (even though 40 percent to 50 percent of those damages were paid as part of the contingency fee agreement with their lawyers), they might have agreed to the defendants’ settlement offers that did not include punitive damages.

The following video was adapted from my book, “Insurance Claims A Comprehensive Guide” Published by the National Underwriter Company and is available at the Zalma Insurance Claims Library

Legal Disclaimer

The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

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