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  • Writer's pictureGregory Sandler


A recent conversation with a person about their expectations on the settlement of their case left me with the concern that many people really do not understand how a settlement or the proceeds of a verdict are to be distributed, so they really don’t have a basis for determining just whether a proposed settlement is a “good” offer to accept. So here are the facts and realities of your settlement and I will show you the math. You should understand this process AT THE BEGINNING of your case, so that you know how it will be applied AT THE END.

  1. Usually you and your attorney will have entered into a written retainer agreement with a specified contingency fee, as a percentage of your recovery. If this fee is one-third, then the contingency fee will be calculated on the total amount of the settlement.

  2. There will usually have been costs that your attorney will have expended for you during the life of your case, such as expenses for medical records to be copied, costs for police reports, filing fees for court, deposition costs, expert witness costs and similar expenses necessary to process the claim to get it to the insurance company or to trial. These costs are actually your expenses, so the attorney will expect these to be reimbursed from the settlement amounts.

  3. During the course of your case you will no doubt have had medical treatment and you are ultimately responsible to the medical provider to pay the bills for that care. Some of you may have health insurance or some other source of payment, but if there are remaining balances due to those providers, they should be paid from the settlement so that you don’t have future liability. Many statutes, such as Virginia, provide the medical providers with a limited lien to protect their ability to collect DIRECTLY from your attorney, and some medical providers have the patient sign a document that gives the provider a broad lien.

  4. Under some circumstances the health insurer that paid your bills, or government health care providers (Medicare, Medicaid, Tricare, Military) will have a federal statutory lien that must be repaid from your settlement. Also in the event that your injury occurred while you were on the job, the worker’s compensation carrier that paid you will also have a lien for partial recovery.

  5. Although the bad news seems to be that everyone wants a piece of your settlement, the good news is that almost every element described above IS NEGOTIABLE, and your attorney will usually strive to maximize your net settlement proceeds as part of his responsibility to you as the client.

So here is the math in an ordinary case:

Gross Settlement Proceeds from Insurance Company $20,000.00

Less Amounts to be Recovered:

Attorney’s Fees (1/3 contingency) $6,666.67

Costs: Hospital Records 24.00

Radiology Records 16.00

Police Crash Report 10.00

General District Court Filing fee 48.00

Service of Suit 12.00


Less Amounts to be Paid To Others:

Hospital Emergency Department 2,350.00

Emergency Physicians 85.00

Dr. Primary Care 400.00

Physical Therapy Center 1,125.00

Medicare Lien Payment 1,485


Total Deductions $12,221.67

Net Settlement Proceeds to Client $ 7,778.33

Although a client might be “impressed” when hearing the amount of a settlement offer from an insurance company, the ONLY important number for the client is the net settlement. That sum is what the client receives as compensation for what they went through as a result of their injury, and sometimes, what they might have to go through forever.

Understand the elements of your settlement, make sure your attorney is clear with you about what MUST BE PAID, and what MAY BE PAID, have your attorney secure all available reductions or discounts that may be offered, and THEN, you can make an intelligent decision about what is in your best interests.

That is what we do at SANDLER LAW GROUP, in every case, every time. It is what you deserve and what you should expect. If you have any questions about what will happen at the end of your claim, ASK ABOUT IT! Call us toll free at 800-9-THE-LAW or (757) 627-8900 to schedule an initial FREE consultation. You may also email us at to get started.

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