When a liability case settles, the number you hear first is the gross settlement. That is not what you get. The gross amount is the starting point. Before you receive a check, several people can be paid from it. Your lawyer is one. The costs of building the case are another. Medical providers and health insurers often come next. What remains is yours.
Most liability lawyers work on a contingency fee. That means you do not pay by the hour. Instead, the lawyer takes a percentage of the settlement. Common percentages are one-third, but the exact number depends on the agreement and whether the case went to trial. The fee is usually calculated on the gross settlement, not on what is left after medical bills are paid. If the settlement is $100,000 and the fee is one-third, the lawyer’s fee is $33,333.33 before costs. That leaves $66,666.67, but it is not all yours yet.
Case costs are separate from the attorney fee. Costs are the expenses advanced to pursue the claim. They can include court filing fees, police reports, medical records, expert reviews, depositions, investigators, postage, and travel. Your lawyer may pay these up front. The settlement usually repays them. Read your fee agreement to see whether costs are deducted before or after the fee is calculated. The difference can be thousands of dollars.
Medical bills are the next major deduction. If you were hurt, you probably received treatment. Health insurance may have paid part of those bills. Hospitals and doctors may have billed you directly. After a settlement, those providers and insurers often want to be paid from the money. A lien is a legal claim against the settlement proceeds. It says, in effect, that this bill must be paid from this recovery. A subrogation right is similar. It lets an insurer that paid your medical bills step into your shoes and seek repayment from the at-fault party’s insurer or from your settlement.
Some liens are simple. A doctor’s office may agree to wait for payment and then accept a reduced amount. Others are not. Medicare and Medicaid generally must be reimbursed for what they paid for injury-related care. Workers’ compensation insurers often have strong repayment rights. Some job-based health plans can also pursue reimbursement.
Your lawyer should gather all medical bills and lien notices before disbursing money. The lawyer typically deposits the settlement check into a trust account. That account is not the lawyer’s operating money. It is used to hold client funds. From that account, the lawyer pays the attorney fee, reimburses costs, and pays valid liens or negotiates them down. Then the lawyer sends you the remaining balance. You should receive a written settlement statement showing the gross settlement, the fee, the costs, each lien payment, and the net amount to you.
Do not assume every lien is correct. Medical bills can contain errors. Insurers sometimes pay bills they should not have paid or seek repayment for treatment unrelated to the accident. A lien may include inflated charges rather than the lower amount the provider accepted from insurance. Your lawyer can request an itemized statement, compare it to the records, and negotiate reductions. This is one of the most valuable parts of settlement disbursement. A $10,000 lien reduced to $4,000 puts $6,000 back in your pocket.
You also need to know what happens if the lien is not fully paid. If Medicare or a hospital agrees to accept a certain amount, get that agreement in writing. If a provider refuses to reduce a bill, the unpaid balance may remain your responsibility. A settlement does not automatically wipe out medical debt unless the provider agrees or a court orders otherwise.
Finally, ask about the timing. Settlement money does not always arrive quickly. The liability insurer may send one check. Liens may take weeks or months to resolve. Medicare and Medicaid can be slow. Your lawyer may hold the entire disputed amount until the lien is settled, rather than paying you part now and chasing the rest later.
The bottom line is simple. A liability settlement is not a lottery ticket. It is a bundle of obligations paid in a specific order. The lawyer gets a fee. Costs get repaid. Medical liens and insurers get paid or negotiated. You get what is left. If you understand that process before the check arrives, you can spot problems early and keep more of your settlement.
