QUESTION

What's the code/law/regulation that specifies a settlement divided into three third (for the attorney, medical bills and the client)?

Asked on Oct 25th, 2012 on Personal Injury - Pennsylvania
More details to this question:
I was involved in a motorcycle accident and got $30,000 for settlement.
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13 ANSWERS

Ronald A. Steinberg
The contract between you and the lawyer controls his/her fee. The contract between you and the health insurance company controls any reimbursement of money which it spent in paying for your medical treatment.
Answered on Oct 29th, 2012 at 6:30 PM

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Insurance Defense Attorney serving Ridgeland, MS at Malone Law Firm, PLLC
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There is no law which states that must be split into thirds. If your agreement with your lawyer is one third that would be his fee via contract law. Not statute.
Answered on Oct 28th, 2012 at 2:16 AM

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Criminal Defense Attorney serving Anderson, SC at The David F. Stoddard Law Firm
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There is no such code/law/regulation. The attorney's fee is by agreement between the attorney and client. The normal or most common fee agreement is for the attorney to receive 1/3 of any settlement, but the parties are free to agree on some other arrangement. The cost of medical bills is between the patient and the doctor(s). The doctors are entitled to be paid whatever they billed the patient, and it has nothing to do with the settlement, although the settlement normally takes into account the cost of medical bills along with a number of other factors. Usually when one receives, medical treatment, among the documents and releases signed is a document assigning to the doctor the right to collect his/her bill from any third party who may be responsible for the patient's medical bill. This in effect gives the doctor a lien against your settlement for his/her bill. If health insurance paid your medical bills, your health insurer has a similar lien. If your settlement is insufficient to pay all of the medical liens, the attorney's fee, and have some left over for you, the court has authority to divide the settlement among those who have an interest in the settlement, the doctors, the client and the attorney. Often, the court divides it 1/3,1/3 and 1/3. However, the court has discretion to divide the fund in a way the court deems to be fair. In such a situation, the attorney will often propose that the settlement be divided 1/3, 1/3, 1/3 rather than going to court and asking the court to do it because this is what the court is likely to do anyway, and you get you money quicker if you agree to it rather than going to court. I cannot cite a case that give the court this authority, but it comes from an equitable doctrine that the court can divide a fund among parties that have a right to be paid out of the common fund.
Answered on Oct 26th, 2012 at 2:52 PM

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There is no actual statute that specifies that division of funds. 1/3 is an average fee charged by attorneys for their services in this type of case. Your contract with the attorney will indicate what his fee arrangement with you is. As to medicals, if you have signed any letters of protection and/or there are any assignments of benefits (especially if any of the medical bills were covered by State / Federal insurance programs), then your attorney is most likely required to withhold these monies from the settlement funds in addition to the 1/3 fee the attorney is charging you. Then in addition to those monies, you are likely also responsible for any costs incurred, usually pursuant to your contract with the attorney, for any costs (this is not including the attorneys fee) incurred by the attorney in pursuing your insurance claim. Then, if there are any monies left to be disbursed from the settlement amount after that, those moneys should most likely be disbursed to you. You should consult with your attorney in regards to this matter.
Answered on Oct 26th, 2012 at 2:52 PM

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Personal Injury Attorney serving Rosemead, CA at Mark West
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As far as I know there is no law that states your breakdown. Attorney client fees (contingent fees) are contractual and you should have had a written contract with the attorney which spelled out his fee. Many lawyers do work on a 1/3 contingency, some work for less, some work for more. Some doctors or health care providers will provide the health care on a lien, meaning that they are entitled to a portion of your settlement to pay those bills. You should look at the medical bills and see how much they actually were. If the settlement is made and there is not enough "pie" to go around, i.e. to give the attorney his 1/3 fee, pay all the medical bills and to have something left over for the client, then sometimes a "deal" can be struck after discussions for division of the settlement. You have a right to an accounting of the settlement and allocation including seeing how much is deducted for medical bills (and the supporting documentation for the bills) and the litigation costs, and the attorney fee.
Answered on Oct 26th, 2012 at 2:51 PM

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Litigation Attorney serving San Antonio, TX at Graves Law Firm
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There's no code or "law" provision that specifies a three-way split. That split is reached by agreement. What it most likely means is that your lawyer did a good job of getting your medical expenses reduced, such that you get to keep a third of the recovery for your pocket rather than having to pay the full billed cost of your medical care. Without the three-way split agreement it's virtually certain that you'd wind up with less money in your pocket.
Answered on Oct 26th, 2012 at 2:50 PM

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Personal Injury Attorney serving Charlotte, NC at Paul Whitfield and Associates P.A.
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Gen Stat 44-50 permits an atty to prorate medical bills to satisfy liens after deducting an atty fee. As a practical matter if the atty fee is one third, that leaves 2/3s. one third will be used to satisfy liens ( does not necessarily pay the bill in full but satisfies lien law) and one third is given to claimant. If you have a lawyer ask him to go over that statute with you. don't try to second guess your lawyer. if you don't trust him fire him and find one you do trust
Answered on Oct 26th, 2012 at 2:49 PM

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Insurance Defense Litigation Attorney serving Auburn, CA at Graves Law Offices
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There is no code section, just many times it works out that way.
Answered on Oct 26th, 2012 at 2:48 PM

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Bankruptcy Law Attorney serving Livingston, NJ
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It is part of the retainer agreement you signed with counsel. In NJ it is Rules of Court : R. 1:21-7
Answered on Oct 26th, 2012 at 2:48 PM

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Assault Attorney serving Richardson, TX
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It is not law. It is a standard settlement division in many soft tissue settlements.
Answered on Oct 26th, 2012 at 2:48 PM

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Automobile Accidents and Injuries Attorney serving Santa Ana, CA at Law Offices of Maurice L. Abarr
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There os no law compelling this result. It is simply an accepted practice that has developed.
Answered on Oct 26th, 2012 at 2:48 PM

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If you are talking about a "3 way split" there is no law on it, it's just something you agree to. Most likely your medical bills are in excess of $10k and your attorney's fees and costs are also so both the health ins. company and the attorney are agreeing to take less $ to make sure you get some money in your pocket. Typically this is done when the case is difficult but the parties involved want to make sure the injured party gets something.
Answered on Oct 26th, 2012 at 2:47 PM

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General Liability Attorney serving Harrisburg, PA at Abom & Kutulakis, L.L.P.
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There is generally no law that governs distribution of settlement funds from a personal injury claim in PA. It is governed by the fee agreement entered into when you retain you attorney.
Answered on Oct 26th, 2012 at 2:46 PM

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