Does an Award of “Restitution” Affect my Personal Injury Settlement?

Woodland Hills personal injury lawyer Barry P. Goldberg handles more than his fair share of drunk driving accidents and other “crime-related” losses.  In these circumstances, it is not uncommon for there to be a criminal prosecution against the civil defendant. Criminal defendants are often required to pay “restitution” to the victim for their conduct or crimes.  So, the question arises; “Does an Award of “Restitution” Affect my Personal Injury Settlement?”

First, some background.  A crime victim is entitled to restitution for economic losses incurred as a result of the commission of a crime from the defendant convicted of that crime.  (Penal Code § 1202.4.)  In addition to compensating the victim, a restitution order is intended to rehabilitate a defendant and deter crime.  (People v. Vasquez (2010) 190 Cal.App.4th 1126, 1133 (Vasquez).) As stated in Vasquez:

“An order of restitution pursuant to [Penal Code] section 1202.4 does not preclude the crime victim from pursuing a separate civil action based on the same facts from which the criminal conviction arose.”  (Vasquez, supra, 190 Cal.App.4th at p. 1132.)  A restitution order reimburses the crime victim for only economic losses; noneconomic losses, such as pain and suffering, are recoverable in a civil action.  (Ibid.)  “Because of the separate interests at stake and different purposes served by a restitution order and a civil action for damages by the crime victim, as well as the different categories of damages recoverable in the two proceedings, the settlement of a civil action and release of the defendant by the crime victim does not discharge the defendant’s responsibility to satisfy the restitution order:  ‘Even when a victim obtains a settlement from a company that insured the defendant for civil liability, the court in a criminal action may order the defendant to pay victim restitution.  This is so because the victim “might rationally choose to accept an insurance settlement for substantially less than his or her losses rather than risk the uncertain . . . possibility that the defendant will pay the entire restitution amount” [citation], and the “victim’s willingness to accept the [insurance settlement] in full satisfaction for all civil liability, . . . does not reflect the willingness of the People to accept that sum in satisfaction of the defendant’s rehabilitative and deterrent debt to society.”’”  (Id. at p. 1133, fn. omitted.)

Although payments received by a crime victim from the victim’s insurance company or from an independent third party such as Medicare for economic losses suffered as a result of the defendant’s criminal conduct cannot reduce the amount of restitution the defendant owes, the defendant is entitled to an offset to the extent those payments are from his or her own insurance for items of loss included in the restitution order.  (Vasquez, supra, 190 Cal.App.4th at pp. 1133-1134; see People v. Bernal (2002) 101 Cal.App.4th 155, 167-168.)  Again, as stated in Vasquez:

“‘The defendant’s own insurance company is different than other sources of victim reimbursement, in that (1) the defendant procured the insurance, and unlike the other third party sources, its payments to the victim are not fortuitous but precisely what the defendant bargained for; (2) the defendant paid premiums to maintain the policy in force; (3) the defendant has a contractual right to have the payments made by his insurance company to the victim, on his behalf; and (4) the defendant’s insurance company has no right of indemnity or subrogation against the defendant.  In sum, the relationship between the defendant and its insurer is that payments by the insurer to the victim are ‘directly from the defendant.’”  (Vasquez, at p. 1134; accord Bernal, at pp. 167-168.)

As you can see from the above, it is perfectly fine to accept a restitution payment from an at-fault criminal defendant.  Further, it is also possible to leverage a civil settlement as part of an overall plan to compensate an accident victim.  An experienced personal injury attorney may even be able to enlist the assistance of the defendant’s criminal defense attorney in order to urge an early and complete settlement of the personal injury claim.