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Basics of Mediation in Personal Injury Cases in Calgary Alberta

Mediation is a growing trend that helps two parties come together and agree to a settlement. It can be particularly beneficial in personal injury cases. Mediation is a good step to take after the injured party has filed a claim, but before they have went to court. Calgary injury lawyers can help you in this step of your claim.

Mediation is an informal process. Neither side has to fear that what they say will be used against them in the event that the dispute proceeds to small claims court. A mediator is a neutral third party that listens to each side and tries to help both parties involved come to a mutual agreement. First, they speak to one side in the presence of the other. Then both sides communicate directly with one another in the mediator’s presence. Finally, the mediator speaks privately to each side. After this, the mediator tries to help each side come together.

We want to recognize this great law firm for their contribution:

Personal Injury Lawyer Calgary Inc
421 7 Avenue Southwest #4900
Calgary, AB T2P 4K9
(587) 288-1862



The process is entirely voluntary. Both sides have to agree to the mediation, and both sides have to agree to any settlement. The cost of mediation is typically split equally between the two parties. There are three main sources for finding a mediator: community dispute center, Calgary professional mediation services, or an independent mediator. Costs can greatly vary depending on the mediation service chosen.injury claims

Community dispute centers are small centers run and staffed by volunteers. The volunteers usually don’t have much legal experience. The trade-off is that the fees are usually minimal or nonexistent. These centers are more appropriate for disputes with neighbors or a local small business.

Professional mediation services are companies run by former lawyers and judges. They typically charge much higher fees. These services are better for dealing with larger companies and business.

Independent mediators are former lawyers and professionals. The hourly fees can be hundreds of dollars, but these people tend to have more experience with personal injury cases in Calgary.

Mediation can allow the injured person to spend less money than if they went directly to court. It allows both sides to deal face to face. This extra energy and investment in time can help push both sides to come to an agreement sooner. On the other hand, this is more time that the injured party and insurance claim adjuster have to spend working on a claim. The fees can be expensive if using a professional, and community dispute centers may not have the experience necessary to facilitate an agreement.

Mediation is most beneficial if the parties are out of options short of going to court, they can’t agree on the degree of responsibility they play in the incident, or if they are more than $2,000 apart on their settlement amount. Mediation can be a way for personal injury victims to successfully put the incident behind them and get a settlement they can be happy with.

Are Personal Injury Claims Tax Deductible?

Most personal injury cases are settled prior to a trial or in congress of a trial. Few personal injury cases are tried to completion, resulting in a court verdict. Once you accept satisfactory terms offered by the defense in a case, the case is settled, ending it. Your attorney is simply required to inform the defense of your acceptance of their offer either verbally or in writing, including acceptance by e-mail, fax, or a combination of written and verbal acceptance. Your next question is undoubtedly, when do I acquire my funds? Its not as simple as just receiving cash or a check in-hand immediately minus representation fees. Taxes can sometimes be applied to your settlement, significantly reducing its impact. Below, we will discuss diverse tax affairs that apply to a personal injury settlement.

Physical Injury Compensation – Not Taxable

Funds acquired from most personal injury claims are generally not taxable under federal or state law. Its irrelevant whether a case is settled prior or subsequent to filing suit in court or if a trial ensued and you won. Neither IRS nor state government are permitted to tax settlements or funds acquired from a winning verdict in most personal injury claims. Federal tax law excludes damage proceeds received in a personal physical injury or physical illness from a taxpayer’s gross income.

Common personal injury damages that satisfy a claimant for items such as lost wages, healthcare costs, emotional distress, loss of holdings, and legal fees are non-taxable provided they emanate from a personal injury or a physical illness. For example, if a germ was negligently introduced to you and caused illness, damages recovered from a claim filed as a result of this illness are non-taxable.car accident lawyer

General Rule Exceptions

Regardless of whether you endure a physical injury or illness, you will be taxed on damages relevant to contract breach even if the breach resulted in the injury that is the basis of the lawsuit. Additionally, punitive damages are always taxable.

Another portion of a personal injury verdict taxable is interest on the judgment. The majority of states have court rules attaching interest to the verdict for the duration of the pending case. For example, filing a suit on January 1, 2012 would yield interest on a verdict beginning from that date until the date on which you receive compensation. An additional example would be if you won at trial on January 10, 2013 but the defendant appealed and you didn’t secure your funds until March 31, 2014, you would receive two years and three months of interest on the amount of the unpaid verdict; this interest is taxable.

Exclusive Claims for Emotional Injury

Bear in mind that the settlement or verdict is non-taxable provided that it stemmed from physical injury. To illustrate, when you present a claim for emotional distress or employment discrimination but no physical injury is claimed then your settlement or verdict is taxable save you can prove even a minute instance of physical injury.

Ensuring A Maximum Non-Taxable Amount in Your Settlement

Occasionally, you may have two simultaneous claims against the defendant, one of which relates to a personal injury and one that relates to another type of claim. In this instance, specifically if the personal injury claim is significantly higher than the other injury claim in the case, its beneficial to clearly illustrate in the settlement agreement what portion of the settlement correlates to the personal injury claim and what portion correlates to the non-personal injury claim.

Although the IRS may consistently challenge a settlement’s non-taxability, categorically appropriating your settlement in this manner grants you the best probability of procuring the maximum settlement excluded from taxation.