Hands down, the most frequently asked question I get from my clients once we settle their personal injury claim is how much of the injury settlement will they get. To answer this question, I must fully outline the personal injury settlement breakdown. Below is an example of a hypothetical settlement in the amount of $25,000.00. Please note that the contract between client and lawyer decides the distribution of an actual case. The following example will provide a clearer understanding of the process of distribution on an actual settlement.
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Costs of Bringing a Claim
1. Attorney’s Fees
The attorney’s fee is the first charge to be taken from the settlement amount. The fee the attorney makes on settlements is how they get compensated for their legal expertise, front money for other cases, and pay members of their staff. If a claim is settled prior to filing a lawsuit, you can expect to pay 33 1/3 percent in attorney’s fees. If a lawsuit has to be filed, however, the fee is usually set at 40 percent. As the fee can vary, it is important to refer to your contract. The agreement is set out in the beginning of representation and will govern the relationship.
In our hypothetical settlement, assuming it was prior to filing a lawsuit, the attorney’s fee is $8,333.33. At this point there is $16,666.67 of the $25,000.00 remaining.
2. Case Costs
In order for your claim to be prosecuted effectively, there are certain expenses that must be incurred. A few examples of case costs include cost for medical records, copy charges, and postage for pre-suit cases. However, the costs escalate when filing suit. In some situations it can wind up costing several thousands of dollars to cover the expenses of a case that is in litigation.
For this example we’ll say the expenses are $500.00. This leaves us $16,166.67 of the $25,000.00 remaining.
What Happens to the Remaining Portion of the Personal Injury Settlement?
1. Liens and Medical Expenses
The final charges deducted from the settlement amount are any outstanding medical liens and medical expenses. This can take the form of a health insurance lien, Medicaid, or Medicare lien. It can also cover a medical payments lien with your own automobile insurance carrier for treatment after the accident. The federal government allows doctors, government agencies, and hospitals to recover any amount you owe for treatment rendered. We refer to this concept as a right of subrogation.
For our hypothetical settlement, let’s assume the following facts. The client went to the hospital by EMS from the scene of the accident. At the hospital, she was in the emergency room and they took x-rays of her cervical and lumbar spine. After weeks of continued pain, she followed up with a chiropractor who wrote a prescription for a cervical MRI. The chiropractor then referred her to a specialist for further treatment based on those results.
Several bills will result from this course of treatment. There will be a bill for the initial EMS treatment. The hospital visit will result in three bills: facility, emergency room physicians, and radiology. Then, the chiropractor will have to be paid, along with the MRI facility and the specialist.
This standard treatment course has produced seven bills, which the settlement will pay. Let’s assume that the total charges incurred were $6,000.00. This would leave $10,166.67 for the client.
2. Pain and Suffering and/or Wage Loss
There’s now $10,166.67 left over from the initial amount of the $25,000.00 settlement. This is to cover any pain and suffering incurred. It also covers loss of income damages if we pay all of the providers dollar for dollar what they billed. In order to put money in our client’s pocket, we must negotiate with the medical providers to reduce the bills. This can be a pretty lengthy process depending on the provider, but definitely in the best interest of the client. I cannot ethically guarantee a client that we will be able to reduce their bills to a certain amount. I can guarantee that we will do everything available to put the most money in their pocket.
To complete our analysis, let’s assume that each provider reduced their bill by one-third. That would give our client an extra $2,000.00, putting a total of $12,166.67 out of $25,000.00 in her pocket.
Brooks Law Group works on a contingency basis. This means that we only get paid if you do through your personal injury settlement. You can learn more about affording legal help here.
Contact Brooks Law Group
If you or someone you love is hurt in an accident, contact us today. It’s important to speak with experienced attorneys who will fight to put every dollar they can in your pocket. For more information, call Brooks Law Group at (800)-LAW-3030 or fill out a free case review form here!