How much of my settlement will I get to keep?
After a personal injury incident, victims file a claim to get compensation for their losses. Your economic and non-economic damages in a personal injury case will be compensated in a structured settlement breakdown, calculated by your lawyer, often using the multiplier method to calculate the total settlement.
Most personal injury cases are settled out of court with a settlement. The settlement you receive isn’t entirely going to be yours. The actual money you end up with from the settlement is going to be quite a bit less than your whole settlement.
In most personal injury cases, the victims typically keep 50%–70% of the settlement after deductions for fees and expenses, such as attorney’s fees, medical liens, case expenses, and other costs.
The exact amount can vary based on the nature of the case, location, and agreements. The deduction ensures you pay out all your obligations before receiving the net settlement.
Attorney’s fees
When hiring a personal injury lawyer, discuss what percentage of your settlement will be their fee. The attorney’s fees usually vary depending on how much experience they have. Usually, a percentage of your settlement goes to your attorney, and typically, it’s one-third of the settlement.
What you should know about contingency fees
- Most professional personal injury attorneys in the United States offer contingency fees for their clients. This means they only get the fixed settlement if they win the case and get you the compensation for their personal injury victim clients.
- A written agreement is usually made between the client and the attorney’s law firm fixing the contingency fee. When the attorney wins the case, the amount will be deducted from the settlement paid by the insurance company or the court.
- The percentage of fees for the attorney in the settlement is usually between 33% and 40%.
- For example, let’s just say your settlement is $150,000, and the attorney will get paid around $49,500 to $60,000.
Medical liens
A medical lien is a legal claim placed on the personal injury victim’s settlement by the hospitals and doctors so they get paid after the case is resolved and the settlement is received.
A portion of your settlement will go to the healthcare providers for treatment costs. This is especially needed when the victim has poor healthcare coverage, so they can get immediate medical care to get fully recovered. Always have an attorney present during negotiations to lower amounts to settle your medical liens.
Litigation expenses
Litigation expenses are paid out of the court when you win your compensation claim, so another part of your settlement will be deducted for litigation expenses. Common litigation expenses are
- Court filing fees
- Fees for serving legal documents
- Deposition costs
- Expert witness fees
- Investigation expenses
- Costs taken for obtaining medical and police records
Contributory negligence
This is not a deduction amount like other things we’ve discussed so far. This is one of the factors that affect your overall settlement.
If you were found liable for your own accident and acted negligently, which led to your injuries, your compensation will be reduced based on the severity of your negligence.
Case-specific variations
Some specific cases, like lost wages, future earning capacity, mental distress, and punitive damages, can significantly raise the overall compensation you receive. However, you need stronger evidence and liability for those claims, so you would face more lien and evidence costs. Always check your settlement for transparency on each deduction.
Example
Let’s see a real-world scenario detailing the net calculation in your settlement.
Calculated on average:
- Let’s just say your gross settlement is $150,000.
- Deducting attorney’s fees: -$49,500.
- Deducting litigation costs: -$2000.
- Deducting medical liens: -$70,000.
- Total deduction is $121,500.
- The net amount for the victim is $28,500.
Key takeaways
- Usually, 33%-40% of your settlement will be deducted for the attorney based on contingency fees.
- The hospital will place a medical lien on your settlement, so they get paid for medical expenses once the settlement is received.
- Your settlement will also be deducted for litigation expenses like court filing fees, expert witness fees, and deposition costs.
- If part of your negligence caused your injuries, your overall settlement can be affected.
- Always check your settlement for transparency on each deduction.