Lawyer took 80% of my settlement money!

Recently on our legal forum a user wrote, “I had a legal case settled and the lawyer for the case took 80% of the settlement and gave me only 20%. I am wondering if this is legal or if there is something I can do about this?”

Contingency fees and paying your lawyer if you win your personal injury claim

If you have been injured due to the negligence of another person you may have the right to file a personal injury claim and recover compensation for your injuries. Compensation may include payment for medical bills, lost wages, and pain and suffering.

Unfortunately, due to the complexity of personal injury laws, if you and the injured party’s insurance company are not able to come to an agreeable settlement decision you may have hire a personal injury lawyer to help you win your injury case.

The good news is a personal injury lawyer will work on a contingency fee basis and will only be paid if you win your case; the bad news is if you win your case may end up paying the personal injury lawyer a substantial amount of your settlement payout.

In fact, not only will you pay a large amount, the lawyer will receive the check for the settlement and deduct their expenses from the settlement before sending you your payment share.

How much is the contingency fee?

The amount the lawyer will charge for the contingency fee may be limited by state statutes but generally ranges between 33 and 40%. For example, it’s not unusual for a personal injury lawyer to receive 33.33% (or one third) of any settlement.

Keep in mind, however, the more time a case takes to resolve the more fees and expenses the lawyer incurs. For this reason, if you accept a settlement agreement and the lawyer is not forced to take the case to court, the fees paid to him will be less. In fact, some states limit the amount paid prior to trial to no more than 33% of the settlement.

What if my case goes to court?

If a personal injury case goes to court the costs could be substantially higher. Expenses the lawyer may pay for and then deduct from the settlement amount could include:

-Payment for expert testimony
-Deposition expenses
-Copying and mailing costs
-Medical liens for any medical care you received
-Traveling costs
-Filing Fees
-Costs of serving papers 

Considering all the expenses that your lawyer may be required to pay for it’s not too hard to imagine that you could end up with a small percentage of the settlement payout.

How do I know how much I will receive?

The percentage of the settlement you will receive and the expenses you will have to reimburse your attorney following a trial or settlement agreement should be clearly defined in the fee agreement you signed with your lawyer.

A good lawyer and a good fee agreement should clearly define expected payments so there is no disagreement after the case is closed.

What should you do now?

What should you do now? If you have read your fee agreement and still believe your personal injury lawyer has taken more than they are legally allowed to receive or if you see inaccuracies in the lawyer’s invoice it’s time to review your state statutes. Most states have some type of arbitration program in place which allows you to contest the attorney’s fee. You can contact your state’s bar association to find out your options and what steps you need to take next.