I believe South Carolina's personal injury lawyers have a responsibility at the outset of a case to explain how the settlement money will be distributed. Injured people rightly believe they should keep the largest percentage of the settlement funds when a case ends. They do not want to be stuck in a nightmare scenario where a case settles for $100k, their attorney makes $40k, the doctors are repaid another $40k, the attorney’s firm is reimbursed $10k in costs, and out of the $100k settlement, the accident victim limps away with a permanent injury and $10k to pay back the mountain of bills that piled up while they were out of work.
Unlike the nightmare I just described, I have never taken more money in attorney’s fees than my client receives at the end of a case. When necessary, I have greatly reduced my fee to ensure the injured person takes home more money than my firm. The client is the one who goes through the trauma and pain. Our South Carolina personal injury has the honor of representing them.
Who Gets Paid After a Personal Injury Settlement?
So where does the money go at the end of a case? Why does a $100k settlement often result in a client receiving $50k? How could that be? Let’s take a closer look, remembering that settlement funds have many purposes – including the repayment of contractual obligations.
1. Unpaid Leins Must Be Fulfilled
First, all liens must be satisfied. A lien is money that a client owes to a loan company, health insurer, medical provider, or any other entity that provided some benefit while the case was pending. I strongly discourage accident clients from ever taking cash advances or “litigation loans.” These companies prey upon the injured, then charge huge interest rates. Conversely, I instruct all clients to file accident related claims with their health insurer even though it creates a lien. Why? Because the health insurance lien will still be far less than what you would owe the hospitals and doctors if you presented yourself as an uninsured person.
After all liens are repaid, your attorney’s costs will be reimbursed. Every lawyer I know advances costs to the client. This does not mean a lawyer can pay your living expenses. In fact, that is highly unethical. Rather, it means the attorney will pay for medical records, deposition costs, expert fees, and any other expenses associated with your case to help achieve the best result. At the end of the case, these costs are repaid out of the settlement funds.
2. Attorney Fees (also known as Contingency Fees)
Next, your attorney will be paid his fee. Most South Carolina attorney’s fees are between 30%-40%. For example, if you receive a settlement for $100k, and the attorney’s fee is 33%, $33k of the settlement would be used to pay the attorney. This is what is known as a contingency fee. The money you owe your lawyer for his work is contingent upon the settlement amount. A contingency fee prevents you from having to pay your lawyer on an hour-by-hour, minute-by-minute basis. If that were the case, most people could not afford an injury lawyer.
3. Remainder Goes to the Client
Once all liens, costs, and attorney’s fees are paid, the remainder is yours. For instance, if your case settled for $100,000, your health insurance lien was $5k, the attorney’s fee was 33%, and his costs were $7,000, you would pocket $55,000.00 (tax-free in most instances). Not bad considering many cases that ultimately settle for $100,000 begin with an insurance company telling you they are willing to pay between nothing and a fraction of the case’s worth.
Speak with a Columbia Personal Injury Lawyer
In sum, while people must, unfortunately, pay lawyers to achieve justice in many cases, and though liens may subtract from your net recovery, without a South Carolina personal injury lawyer and healthcare insurer, you might never receive the medical treatment or settlement award your injury merits. We offer free consultations and would be happy to answer your questions. Contact us online today or call us at 803-790-2800. Our offices are conveniently located in Columbia and Myrtle Beach, and we have been proudly servicing clients throughout the surrounding areas. Contact us online today or call us at 803-790-2800 (Columbia, SC) / 843-427-2800 (Myrtle Beach, SC).