Is it true that my medical costs will come out of my end of the personal injury settlement?

Question

I am getting a MV accident settlement and my lawyer is taking out his costs before splitting the settlement. He says that my medical costs that were not covered comes out of my end of settlement! Is that TRUE?

Jeffrey Wittenbrink · Answer

You should have a written contract between yourself and your attorney that details exactly how any proceeds are to be disbursed.  It is normal for costs to be advanced by the attorney, but then recouped from any settlement proceeds.  This should have been explained to you carefully prior to your attorney taking your case.

Earl Straight · Answer

Normally yes. Attorneys fees are usually based on the gross, or total, settlement amount.  So if your case settled for $10,000, and attorneys fees were 35%, attorneys fees would be $3500.  All medical expenses would have to be paid out of the remaining $6500. You'd have to review your contract with your attorney to see if his terms are different.

Tina Fox · Answer

Yes this is true. Your medical facilities have more than likely sent what is called "liens" to the attorney and the insurance companies and your attorney is required by law to pay the medial facility first before you are compensated.

Paul Whitfield · Answer

Yes. When a lawyer accepts a case on contingency (percentage) his fee comes off the top. Unpaid medical bills are then paid from the recovery. What is left is basically for your pain and suffering or lost wages.

Andrew Velonis · Answer

Yes.  Here's why: your claim is to compensate you for your loss. Uncovered expenses are part of that loss. You received the medical treatment and you owe the money to the providers, so don't act surprised that you have to pay. The real problem is that a settlement is a compromise, but if the total claim is being compromised but the medical bills are not, then you end up with less. Maybe you should talk to your lawyer about negotiating your medical bills.

David Stoddard · Answer

Yes. There really isn't any "your end" of the settlement. The entire settlement is yours. In the case, you are asking that you be compensated for your loss, including your medical bills, lost wages, and pain and suffering. Your settlement is for all of this. Your lawyer charges a percentage of all of this. Often, the medical bills is the largest part of the case. If you had no case, you would have to pay these bills yourself. Even health insurance must be reimbursed in most cases. The attorney normally has to pay the doctors and health insurance directly because they have a signed assignment of benefits from you stating that they will be paid out of any lawsuit that you may have.  his is a standard clause in most health insurance contracts and is among the standard forms you sign when you get medical treatment. If the lawyer does not pay them, but gives you the money expecting that you will pay them, they can sue the lawyer if they do not get paid.

James Kelaher · Answer

Yes. Typically, the attorney's contract says that his percentage fee comes out of the gross recovery. That means if he settles a case for $10,000, if he had a 40% contract, then his fee will be $4,000.00. If he had $300 in advanced client costs, then his fees and costs will be $4,300, leaving you $5,700. If you have $2,000 in medical bills, then those come out of the $5,700, leaving you with a net of $3,700. While different attorneys do it differently, the above is typically standard in the industry.

William Allen · Answer

It probably is true, but he should be trying to negotiate those costs for you to maximize your recovery.

Travis Prestwich · Answer

Typically yes.  Most contingent fee agreements are such that the attorney fees and costs come out first, then repayment of medical expense liens, then payment to the client.  These are expenses for which you are responsible and the attorney helps to collect reimbursement for you from the insurance company.  However, the attorney typically will be able to get the outstanding medical expenses reduced.  It really depends on the circumstances, whether the medical providers have held the bills rather than send the to collection, etc.

Mark Leonardo · Answer

Ordinarily that is true, but this is governed by your own fee agreement.  There is no standard  attorney fee contract, but from my understanding, including my own agreement that I use, medical expenses come out of the settlement proceeds after the attorney is paid his or her percentage and after costs are reimbursed.

Gregory Casale · Answer

Yes it is true. Did you expect your lawyer to pay your bills from his portion? Whatever is not covered is your responsibility. Your lawyer should try to mitigate the unpaid bills, but whatever is left over is your responsibility.

Lyle Masnikoff · Answer

Yes. Your PIP insurance should be used for the first $10,000. Your attorney should be able to negotiate the medical bills down so you pay less.

Jared Altman · Answer

Yes. That is absolutely true. Any medical bills are your responsibility and come solely out of your share of the recovery, not the attorney's share. But, ask your lawyer to try to negotiate down the amount that you have to pay to these "lienholders", as they are often referred to. Many times they don't technically have "liens" at all. An argument can be made that the "lienholder" should reduce what they take by 1/3 since you were the one who went out, hired an attorney and pursued the claim and a cost of 1/3 to you. You can also sometimes get them to reduce by an equitable share of the expenses of prosecuting the case as well.  Now, here is another kicker. Imagine the lawyer successfully negotiating down a medical bill owed, let's say for example from $63.00 to $42.00. He saves you $21.00. That is technically part of the recover he made for you and he can add that to the gross recovery. For example, let's say you settled for $9,000.00. The $21.00 would get added to the $9,000.00 so the "real" recovery is $9,021.00 (even though the defendant only pays $9,000.00). Now the lawyer, if he wants to, can take his 1/3 fee not on $9,000.00, but on $9,021.00, which will give him an additional $7.00 in attorney's fee that comes right out of your pocket! That's all legitimate.  Now, some lawyers never do this as a matter of policy. Other lawyers treat it on a case by case basis. For example, in a relatively small recovery with a large "lien", they would not take the extra fee. But, in the case of a large recovery, with a small to moderate "lien", the lawyer might feel that taking a fee on the money he "saved" you is justified. The lawyer did, after all, "earn" that money for you by negotiating down the amount of the medical bill that will come out of your share.

Gary Moore · Answer

It may be that the doctor or doctors who treated you demanded a lien against your recovery from your personal injury claim before they would cooperate with your lawyer in providing a report or reports as to your injuries. If a lien was a necessary part of handling the case the medical bills must be paid from your funds. If the settlement amount is not very large your lawyer may be able to get the doctor or doctors to compromise the bill or bills before your case is settled, accepting less than the full amount of your medical bill or bills.  Gary Moore

Matthew Kaplan · Answer

My suggestion is for you read your retainer agreement carefully.  It should spell this out clearly.  If you are confused, schedule an appointment with your attorney and ask for a detailed explanation.

Josh Lamborn · Answer

Your agreement with you lawyer should be in writing.  Typically contracts on personal injury agreements provide for payment on a contingency fee basis. That means that you lawyer will front the costs on the case and delay payment for his time until the case is resolved.  Then he or she is reimbursed for his or her costs and is paid for his or her time according to the contract.   This agreement is a contract between you and your lawyer. If you signed the contract and the language is clear then you are bound by the terms of the contract.  The terms on the contract are negotiable so different lawyers provide their services with different rates of repayment. Most personal injury contracts provide for a 1/3 contingency fee if the case is settled prior to trial.  Some increase up to 40% if there is a trial or arbitration because that requires more time and work.  Most contracts provide for the attorney fee to be taken out of the total payment then subtract the costs and leave any medical payments outstanding for the client to pay.  Medical bills are economic damages that should have been taken into account in the settlement.  It is important for a lawyer to make sure you understand your net take on any settlement amount before you agree to the settlement terms.

Robert Lucky · Answer

Well, you are asking about two different types of cost. The first set of costs is the amount your attorney paid out to help prove your case. The second set of costs is your medical expenses.  You should refer back to the contract or agreement that you signed when hiring your attorney to make sure this is how it was explained to you. I am not familiar with your particular case so I am unable to adequately advise you as to correctness of his actions.

Russell Gray · Answer

Whether that is true or not depends on the agreement with the attorney.    Read the agreement, and see what it says.  Typically, medical expenses  are paid out of the settlement money.

Timothy Klisz · Answer

Yes, that is generally true, except auto cases in Michigan should have  nothing to do with a 3rd party case, so I am a bit confused.

Ronald Lowry · Answer

Yes.

Steven A. Schwartz · Answer

Medical bills not covered by other insurance can come out of your settlement proceeds.  You will want to make sure that ALL other sources have been exhausted.  In Massachusetts, there is PIP or personal injury protection benefits in every car insurance policy that should pay bills, as well as any health insurance you may have (private or public).  If money is to be taken out of the settlement, then your attorney should have negotiated this medical bill money in addition to your money for pain and suffering.

Eric Rothstein · Answer

Yes. But depending on what type of medical insurance you have, there might not be a valid lien.  Under a recent NY law, liens for medical costs are not enforcible unless its statutory such as a true ERISA plan or worker's comp.

Thomas Patton · Answer

Settlement terms are always negotiable. That is the definition of a settlement - negotiated settlement. Unpaid medical bills are either included (typical) or paid separately (unusual), depending upon whatever the parties have agreed to. Negotiations usually refer to "inclusive" offers, which means the offer includes medical bills, which must then be paid out of the settlement. Most, or nearly all, attorneys do figure their fees off the top of an inclusive offer.

Alexander Evans · Answer

You should talk to your attorney about the Fee-Agreement you signed and any concerns you might have.

Francis Paul Hajek · Answer

Yes.  Your recovery is based in large part on your medical bills and any outstanding bills are your responsibility.  Most likely, the providers have asserted liens against your case and so you are obligated to pay the bills. Of course, you can check your contract with the lawyer but I am pretty sure that he or she did not agree to pay your bills out of his fee.  It is standard practice to pay the medical bills out of your share of the proceeds.

Richard Lowell · Answer

It depends on the terms of the retainer agreement; but normally, that is true.

Emily Terriquez · Answer

The answer to your question depends on what your fee agreement with your lawyer says. Different attorneys deal with this in different ways, so it is difficult to say without reviewing the fee agreement. If you don't have a copy, your lawyer should be able to provide one to you.

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Is it true that my medical costs will come out of my end of the personal injury settlement?

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