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The Breakdown of a Hypothetical Settlement of $100,000.00

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It is in the newspaper headlines all around the world. Verdicts and large settlements are given every day. It appears that all the plaintiffs you read about are getting rich. However, in a personal injury case that is very rarely true. Below is an example of a possible settlement of $100,000.00.

The distribution of an actual case is decided by the legal agreement that is made between the client and their lawyer. The following is to provide a clearer understanding of the process of distribution on actual settlements.

  1. Legal Fees –The legal fee will be the first amount to be taken out of the $100,000.00. While the fee can vary, you can expect it to be about 40 to 45% of the settlement amount. This amount is the way a majority of personal injury attorneys pay for their legal expertise, pay money upfront for other cases, and pay members of their staff. There are also many cases where this fee amount will need to be split between several firms, such as in the case where there is a referring attorney involved. Assuming the legal fees will be cut in half for two different law firms and a contract for a 40% contingent fee, $20,000 will go to Firm A, and $20,000 will go to Firm B.
  2. Legal Expenses –(At this point there is $60,000 of the $100,000.00 remaining). For claims to be prosecuted by an attorney, certain expenses will be incurred. A few examples of legal examples would include deposition costs, expert fees, and costs for traveling. In some situations, it can wind up costing several thousands of dollars to cover the expenses of a case. For this example, we’ll say the costs are $18,000.
  3. Liens and Medical Expenses – (At this point there is $42,000 of the $100,000.00 remaining). The final amount that is to be paid from the settlement amount is any outstanding medical liens and expenses. It is allowed by the federal government and most states for physicians, government agencies, and hospitals to recover from settlements any amount they are owed. A rule that is often used when calculating solutions is to figure the recovery amount may be up to three times what the cost of their medical expenses is. In this example, it means the plaintiff’s medical expenses were about $33,000.
  4. The Client’s Part – There is only $9,000 left from the beginning amount of $100,000.00 which covers lost wages, pain, and suffering, the time used to file the lawsuit, and in many cases lost relationships with a significant other.

It is a misconception that plaintiffs file a suit to get rich—A lawsuit is brought about to ensure no-one else ends up going through what they had to go through—it is not about the settlement amount. Communities are made to be a lot safer when plaintiffs stand their ground against those that break the law and make sure they are held liable for their actions.


Michael Ehline - PI Law Tutorials

Michael Ehline is a highly trained personal injury attorney in Los Angeles, CA. He writes educational articles to help injured consumers.

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