Congratulations – your attorney has called to notify you that you received a settlement offer on your personal injury case. But how much of the settlement ends up in your pocket? It’s your case. You’re being compensated for your injuries and expenses. How much of the settlement do you get to take home?
It may seem like forever since you were injured. In order to be compensated for your damages, you retained a personal injury lawyer. Your attorney handled the claim with the insurance company. During that, you’re the one who was hurt and left injured. You’re the one who went to all the doctor appointments. You may have missed work. You had to live with the pain every day. You had to follow-up with more doctor visits. When your attorney calls to tell you the insurance company wants to make an offer, you may finally feel like you reached the finish line after a long race. The insurance company can never put you back to the way you were before the accident. So they offer the next best thing. Cash. But how much cash do you keep from your settlement? You need to make sure you know the bottom line before you ever agree to any settlement offer.
If your case settles, the insurance company will send your attorney a Release. This is an important document. It releases all your claims for your personal injury case forever. You can never re-open your personal injury claim after it settles, and you sign the Release.
Your attorney must prepare a closing statement – called a settlement statement, to account for all the costs, expenses and liens that you must pay out of your settlement. Make sure your attorney sends you a copy of the settlement statement before you sign the Release.
A personal injury attorney does not require that you pay any money when you sign the retainer agreement. Many attorneys advertise: No fee unless you receive a settlement or monetary award. This is because your attorney’s legal fee is contingent on your settlement. In other words, if you do not receive compensation, you will not have to pay your attorney. In New Jersey, court rules allow attorneys charge a contingency fee – which is a percentage of your settlement amount. However, before the legal fee is calculated, the attorney first deducts all expenses from the gross settlement amount. Attorneys are reimbursed for legal expenses for medical records, investigation, court costs, filing fees, expert medical and liability witnesses, and deposition transcripts fees. Once the legal expenses are deducted, then the attorney fee contingency fee is calculated.
After the attorney fee is calculated, the attorney is required to pay any outstanding medical bills, health insurance liens and Medicare and Medicaid liens. These amounts are all deducted before you are compensated for your personal injury claim. This is how you arrive at the bottom line on your settlement.
For example, if your attorney tells you that the insurance company wants to settle your case for $50,000, you may think that the attorney gets one-third and you get the rest. However, if the attorney advanced $5,000 in expenses, then your net settlement would be $45,000. After the one-third legal fee, you would net $30,000. However, you need to know if there are any liens or outstanding bills. If your health insurance company or Medicare has a $20,000 lien, you would only be left with $10,000 from a $50,000 settlement.
Every check, expense, bill and lien is required to be accounted for on the settlement statement. And, most importantly, it lets you know who much you keep from your personal injury settlement. If you have any questions about any costs or expenses, make sure your attorney explains all payments. The attorney must have receipts for all expenses and medical bills and liens for your case. After you review the settlement statement, if the settlement does not fairly compensate you for your injuries, you should not agree to the offer. Once you are satisfied with the settlement statement and sign the Release, your personal injury case will finally be over. There should not be any surprises when you receive your settlement check.
Make sure you know how much compensation you will receive for your injuries before ever agreeing to a settlement and signing a Release!
If you or a loved one is injured in an accident in NJ, you should contact an attorney familiar with handling these claims. An experienced NJ Injury Lawyer will know how to conduct an investigation and contact the insurance company so you can make a claim for your injuries. My NJ Injury Lawyer Howard P. Lesnik, Esq. offers free strategy sessions to address any issue or questions you may have about your accident claim in NJ.
Please contact NJ Injury Lawyer Howard Lesnik, Esq., immediately if you were involved in a NJ accident. I personally handle NJ personal injury cases on a regular basis. Please contact me now by email, by phoning 908.264.7701, or by completing the form to the right to schedule your complimentary 30-minute strategy session.