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Personal Injury Settlement Proceeds

Been the victim of Legal Malpractice? Discuss it here.

Personal Injury Settlement Proceeds

Postby Urian » Mon Dec 12, 2016 9:58 pm

Hello,

I recently signed up with an attorney after I had an auto accident. The other party is at fault and their insurance company has already accepted the liability. I am going through treatment right now.

I have a confusion about the disbursement of settlement proceeds in my case. How will my lawyer get his portion of the settlement? Does he get his % from the gross total of the settlement or from the net total that remains after paying all the medical bills and other bills?

Also, my lawayer recommended me to use my PIP from my own insurance coverage? Will this benefit me in any way? Can I get all the proceed coming from the PIP for myself and use the settlement proceed to pay the medical bills and dstribute the attorney % from the remaining amount after all the bills are paid.

I would really appreciate your help in this matter.

Thank you in advance.
Urian
 
Posts: 54
Joined: Sun Jan 19, 2014 5:25 am

Personal Injury Settlement Proceeds

Postby Burnette » Tue Dec 13, 2016 5:35 am

Hello,

I recently signed up with an attorney after I had an auto accident. The other party is at fault and their insurance company has already accepted the liability. I am going through treatment right now.

I have a confusion about the disbursement of settlement proceeds in my case. How will my lawyer get his portion of the settlement? Does he get his % from the gross total of the settlement or from the net total that remains after paying all the medical bills and other bills?

Also, my lawayer recommended me to use my PIP from my own insurance coverage? Will this benefit me in any way? Can I get all the proceed coming from the PIP for myself and use the settlement proceed to pay the medical bills and dstribute the attorney % from the remaining amount after all the bills are paid.

I would really appreciate your help in this matter.

Thank you in advance.
Burnette
 
Posts: 52
Joined: Fri Jan 17, 2014 11:57 pm

Personal Injury Settlement Proceeds

Postby Huxly » Wed Dec 14, 2016 3:51 pm

Andy,

Thank you for your questions. If offers me an opportunity to explain an issue that affects all clients: how does one calculate legal fees and expenses in a personal injury lawsuit. I cannot answer the specifics in your case without knowing the state in which you reside and seeing the retainer agreement that you signed with your attorney. I will answer your questions based on practices and rules in New York and I will use the text from the retainer I use with my clients to explain how the financial arrangements work. Before we start, I want to emphasize that you should find the answer to all financial arrangements in the retainer you signed. You should also ask your lawyer any questions that you have. The Retainer

All service and financial arraignments should be made clear in the retainer agreement that a client signs with an attorney. The retainer agreement is the contract between client and attorney and it spells out the arrangement for services and fees.

I have revised my retainer over the years to put it in plain English and to make clear the roles and responsibilities of my client and myself. I previously used a standard retainer full of legalese that had the facts right, but was not very clear. In revising the retainer, I have not changed any of the basic provisions, but it does make clear all of the components of the agreement I have with my clients.  

Contingency Agreement

Most personal injury attorneys operate under a contingency arrangement. Here is how my retainer explains my contingency agreement:

“Under this agreement, I will pay for services provided by Attorney Schlitt on a contingency basis. Payment on a contingency basis means that I will pay no legal fees upfront or during the case. The legal fees will be paid out of the funds received through the resolution of the claim at trial, settlement or otherwise.

If the case does not result in a payment of an award or settlement or other payment, then I will not be liable for any legal fees. I will only pay a legal fee if this claim results in a recovery of money through a suit, settlement or otherwise.”

If you have a contingency agreement, then you will only pay legal fees if your attorney earns you an award or settlement.  Most personal injury attorneys operate under a contingency arrangement. Determining the Legal Fee

You asked how the legal fees will be determined in your case. Again, without knowing your state or seeing your retainer agreement, I cannot know for sure, but in most instances the fee is calculated after subtracting legal expenses related to the case. Here is how my retainer agreement explains the calculation of legal fees:

"I agree to pay legal fees of one-third of the sum recovered whether received through a suit, settlement or otherwise. The fee shall be calculated on the net sum of total payments made after deducting all legal expenses associated with prosecuting this claim. Here is an example of the legal fee calculation. If there is an award of $1,000 and Attorney Schlitt advanced $100 in expenses, the legal fee is calculated on the remaining $900, not the full award of $1,000. In this example, I would reimburse the $100 in expenses and pay $300 in legal fees(that is one-third of $900). I would retain $600. Payments made for the following shall not affect the calculation of the fee:

•   Liens

•   Assignments or claims paid to hospitals, doctors, other medical providers, or insurance companies"

Under most contingency arrangements, payment for outstanding medical bills or repayment of medical liens come out of the client’s share of the proceeds and do not affect the calculation of the legal fees. In the above example, if the client had $100 of medical bills to pay, that would come from the client’s proceeds of $600. What are Legal Expenses?

In most retainer agreements, legal expenses are subtracted from any award or settlement before calculating the legal fees. Under most retainer agreements, the attorney will advance the legal expenses and collect reimbursement after an award or settlement is paid. In doing so, the attorney funds the expenses of the case. The legal expenses that an attorney may charge to a client are those expenses directly related to prosecuting the case and may not include overhead or salaries. Here is how my retainer agreement defines reimbursable legal expenses:

"Attorney Schlitt will incur expenses in prosecuting this claim. Those expenses may include, but not be limited to the following:

•   Court and filing fees

•   Fees for medical, government, public and other records and documents

•   Expert testimony and consultation

•   Investigative services

•   Transcription fees for testimony given at depositions

•   Production of materials for use at trial or in trying to settle the claim

•   Mailing and shipping expenses

Attorney Schlitt may agree to pay these expenses in advance of a resolution of this matter. Upon resolving this matter, I will reimburse Attorney Schlitt for any advanced expenses from any payment received as a result of a trial, settlement or otherwise.  These expenses are reimbursed before calculating Attorney Schlitt’s legal fee(see the example above in “Legal Fees”)."

What should not be counted as legal expenses? Unless otherwise agreed upon by the client and attorney, the following should not be counted as legal expenses, but remain the responsibility of the attorney:

•   Salaries for law firm employees

•   Overhead for the law firm

•   Payments made to other attorneys working on a case(e.g. a payment made to an attorney covering a court hearing or a deposition, etc.)

•   Legal education

•   Purchase of equipment

As a client, you have a right to see a line item accounting of expenses. You should ask questions about any charges you do not understand or do not think are appropriate. PIP Benefits

I will not be able to offer a definitive answer on your question regarding PIP benefits because I do not know the state in which you live. I can tell you that in New York, PIP benefits are administered in a No- Fault system. If this is the case with your PIP coverage, then you should use the PIP medical coverage to pay your medical bills. Depending on the rules in your state, you may not have to refund the insurer for those payments. In New York, No-Fault pays medical bills and other economic losses and, if you sue for pain and suffering and win an award or settlement, you do not have to reimburse No-Fault for medical expenses. This is because your lawsuit recovers for pain and suffering and only economic losses [medical expenses and lost wages] to the extent such losses exceed $50,000.  

I hope this makes clear how a New York personal injury attorney calculates legal fees and expenses. The specific arrangement you may have with your attorney is documented in the retainer agreement you signed with your attorney. If you have questions, you should find the answer in that retainer agreement or ask your attorney. All lawyers should understand, if you retain us as counsel, we work for you. I hope you found this information helpful. If you have questions or believe you have a personal injury or medical malpractice case, I will be glad to answer your questions and assist you. You can call me at 1-800-660-1466 or email me. You can also visit my website or read more on my blog, New York Law Thoughts.  

Carol L. Schlitt New York Personal Injury Attorney

www.SchlittLaw.com

1-800-660-1466

[email protected]

This material is intended for informational uses only. It is not meant as legal advice. To receive legal advice, you should consult an attorney.
Huxly
 
Posts: 41
Joined: Fri Feb 14, 2014 6:12 pm


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