Understanding the nuances of victim restitution in California criminal cases is crucial for legal professionals and victims. Injured victims seek restitution following civil settlements in these important areas of practice.

Civil settlements don't erase the requirement for criminal restitution. In California, defendants can still be ordered to pay victims for economic losses, even after settling a civil case.

Defendants can still be ordered to pay victims for economic losses after settling a civil case.

Whether in the context of an automobile accident involving a drunk or reckless driver, an assault, or a property crime such as vandalism, the same set of facts can often give rise to both a criminal prosecution and a civil action between the criminal defendant and the alleged victim.

Often, the parties come to a civil settlement agreement outside of court before the criminal case is resolved. This presents a complex set of issues regarding the calculation of criminal restitution, about which both civil and criminal counsel must be prepared to advise their clients. Being aware of these challenges will make you feel prepared and knowledgeable.

Our law firm, with its expertise in the field, has handled several contested restitution hearings following criminal sentencing, despite a civil settlement having been reached and fully funded in advance.

Victim restitution in California state court is mandatory under Penal Code 1202.4 PC. The categories of losses compensable in criminal restitution are narrower than those available in a tort suit.

The victim must be compensated for economic losses, including property damage, lost wages, medical expenses, and legal fees. Big-ticket items, such as emotional distress damages or punitive damages, which can be pursued in a civil suit, are not available in criminal restitution.

If a stipulation cannot be reached, the defendant has the right to request a hearing to determine the amount of restitution. The burden of proof is significantly lower than that required to obtain a criminal conviction, ensuring a fair process for all parties involved.

Restitution is a Constitutional Right

The first major pitfall is assuming that a civil settlement that contains a general release will prevent a crime victim from recovering additional amounts in restitution. To the contrary, case law is clear that a civil release does not bind the criminal court. Ordering full victim restitution is a statutory command binding the court.

California Penal Code 1202.4 PC outlines the law regarding ordering restitution. That text of the law says, "The Legislature intends that a victim of crime who incurs any economic loss as a result of the commission of a crime shall receive restitution directly from any defendant convicted of that crime."

The statute also says that the judge shall order full restitution, unless there are compelling and extraordinary reasons not to do so. The defendant's ability to pay the restitution amount does not constitute a compelling and extraordinary reason not to order it.

Simply put, victim restitution is a fundamental right under state constitutional law. More fundamentally, neither the criminal court nor the prosecuting agency is party to the civil settlement.

No matter what the release purports to do in binding the victim from seeking further compensation, the prosecutor cannot be prohibited from informing the court about the full amount of restitution owed, and the court cannot be prohibited from ordering that the defendant pay it.

Further, the victim can return to criminal court if additional medical or psychological care costs are incurred during probation.

What are the Defendant's Rights?

However, all hope is not lost for the defendant because a dollar-for-dollar offset against criminal restitution is available for payments already made pursuant to a civil settlement. This, however, leads to the second common pitfall.

As noted, many categories of damage may be encompassed in a civil settlement that are not available in criminal restitution. If the civil settlement is silent about exactly what is being compensated, then the defendant may face a finding that the civil settlement is not an offset against restitution.

Importantly, the defendant is entitled to contest the medical bills and out-of-pocket costs presented by the victim in a restitution hearing, calling their experts to testify about the true value of the civil settlement.

Example of Victim Restitution

Consider a hypothetical. The drunk driver who caused a car accident enters a settlement with the victim motorist, which provides only that the defendant will pay $20,000 to the victim as "full resolution of their dispute."

In criminal court, the prosecutor presents evidence that the victim incurred $10,000 in medical bills, which were not compensated by insurance. Some courts will find that the $20,000 settlement must have included the victim's medical bills.

As the agreement was silent, however, the defendant may find himself in an uncomfortable position of being ordered to pay $10,000 in criminal restitution in addition to the $20,000 civil settlement, which could have been intended as compensation for emotional distress.

This underscores the importance of clear and comprehensive civil settlement agreements, making you feel cautious and attentive.

Marsy's Law

Disputes further arise when the victim demands, in a criminal restitution hearing, the fees she paid to her civil lawyer, usually a contingent fee earned for obtaining the civil settlement.

Under criminal restitution laws, reasonable attorney's fees, whether for obtaining a civil settlement or for representing the victim under Marsy's law in criminal court, are compensable.

For example, the paid civil agreement now stands at $100,000, stipulating that the entire settlement covers only out-of-pocket economic losses, such as medical bills, and that $100,000 represents the total amount of the victim's losses.

However, the settlement agreement includes another common provision that the parties will bear their own attorneys' fees and costs.

The victim's attorney takes a 20% contingency, or $20,000. Therefore, the victim effectively incurred $20,000 in attorney's fees, and because the agreement specified that each side would bear its fees, the defendant did not compensate the victim for those fees.

The criminal court will calculate that the defendant received only $80,000 as an offset against the $100,000 restitution amount. Our unfortunate defendant will effectively pay the victim $120,000, comprising $100,000 from the original settlement and $20,000 in restitution not offset by the settlement.

Reasonable Restitution

Recall that the criminal court's calculation of restitution needs only to be reasonable. In an even more complex situation where the civil settlement provides for both economic and non-economic damages, the attorney representing the victim is charging his client to obtain both compensable and non-compensable amounts.

Just as non-economic damages are unavailable in restitution, attorney's fees spent obtaining non-economic damages are also unavailable.

However, in mixed damages situations, many courts will simply find that the time spent by the attorney is indivisible for all practical purposes, as their efforts were directed at obtaining both categories of damage. They will simply order them reimbursed in full as restitution. As a practical reality, given the criminal context in which these questions arise, the courts may err on the side of fully compensating the victim.

For more information, contact our Los Angeles criminal defense law firm, Eisner Gorin LLP.

Dmitry Gorin and Alan Eisner are State-Bar-Certified Criminal Law Specialists who have litigated over 100 criminal jury trials in state and federal courts. Robert Hill is an associate attorney at Eisner Gorin LLP, which represents clients in high-profile matters nationally.

Related Content:

• Marsy's Law
• Penal Code 1202.4 PC