Personal Injury Settlement Question?
Question:
Answer:
As a personal injury attorney, I am somewhat qualified to respond to this question! Here is the deal:
depending upon your jurisdiction/state, the percentage that the attorney charges (which is almost always controlled by statute) can vary from a sliding scale to a fixed rate from between 25% and 40%. In addition, the type of case you have may also effect the % that can be charged. Although these percentages are negotiable, I do not know of any attorney who charges anything other then the statuory rate.
In most states, the rate is applied after deduction for all expenses actually incurred in the pursuait of the case. For example, expenses include: Court filing fees, stenographer fees, expenses for investigation, witness statements, medical records and reports, expert witnesses (both examinations/reports and testimony), mail costs, etc. These expenses DO NOT include the attorney time spent doing any of these things. All expenses charged to the case should be set forth for you in a closing statement. Assuming your attorney is ethical, he/she will have no problem showing you all the expenses and explaining what each one is for. As an example, let's say the case settles for $100,000. First subtract the expenses. This could include 250 for the Court filing fee (index/docket number), 100 for a request for judicial intervention 150 for the filing of a few motions to keep the case moving, 200 for copies of hospital records, 600 for an examination and report from a doctor who will be available for expert testimony, 1000 for an accident reconstructionist's report, 7,500 for the doctor to come into court to testify, 1,500 for the engineer (accident reconstructionist) to come into court to testify, and 700 for court reporter fees for pre trial depositions. That would total 12,000 in expenses that the lawyer laid out on your case. Doing the math (using your states 40% contingent fee figure) that leaves $52,800 for you (tax free), $35,200 as a fee for your lawyer and the lawyer gets reimbursed for the 12,000 in expenses. (If that seems like a high fe, remember that in a contingent fee case, the lawyer usually lays out all the expenses in advance, and although you are responsible for the expenses, win. lose or draw, he gets no fee if he does not win the case!
In terms of the medical expenses, for treatment as opposed for copies of records or testimony, the matter is handled differently. Treatment expenses are not costs incurred in the "legal" case, but rather they are expenses that are incurred regardless of there being a case or not. These are your responsibility. Usually people have health insurance or no-fault auto insurance to pay these expenses. Sometimes, but not always, an insurance company that pays medical expenses may have a lien on your recovery to be reimbursed for their payments. However, there are ways to deal with this. First a lien is not always asserted or present. Second, even if they are seeking a assert a lien, a good lawyer may be able to defeat it. Third, if there is a valid lien, your lawyer should take this into account when negotiating the case and thereby insist on a larger settlement if a lein is going to take some money out of your pocket. Please note that a lien comes out of your share of the settlement and that there may be liens for things other than medical bills, such as public assistance, if you've received any.
Obviously, you must know what you will get, before you agree to a settlement. But taking this one step further, you should discuss with your attorney what a likely jury result would be, so you know if the offer is a good one or bad one. Remember that a settlement may not be everything you thought you would get, but it does eliminate the potential jury verdict of a smaller amount or a defense victory. YOU must determine if the risk of a lesser amount, or a loss, is better than the offer you are considering, even if it's not exactly what you had in mind. (I know it's hard, but try to be objective in considering any offers.)
I don't know what state you are in, but in Michigan the law says an attorney can take no more than a third (33.3%) AFTER all bills and costs are paid.
All expenses first and then 40%
Actually, your insurance company will want reimbursed by any settlement you get. So, if you had $1,000.00 paid in medical, you can count on that coming out too. The formula is: Total Settlement less 40% for fees and then less expenses. Expenses include: copying, postage, depositions, copies of accident report or photographs, expert testimony, etc. This is where your medical bills would be paid from also. NOTE: The attorney fees came right off the top before expenses.
It sucks.
The 40% should be inclusive...otherwise he could state that there are additional costs involved that would then push this amount over the agreed upon 40% leaving you with less than he obtains (not fair!)
I'd have this clarified if I were you as the lawyer should not stand to gain more than his client in a settlement of any sort (although of course that does happen more frequently than it should).
First, check with the Law Society or the Bar Assoc. that governs Lawyers and normally has a matrix of acceptable fee ranges in cases like this, to determine what the max. is that he can gain from this situation...then go to him and ask him to break down the 40% to show you what it entails.
I don't understand the cost for a Med exam coming out of his pocket either to be honest...but then I don't have the background on this to comment any further...simply put, if you are not fully informed about this fee investigate...when it is paid will be too late to question it.
Good luck
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