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