After all the health insurance bills were paid there was an available $50,000 to be paid out. However just before my attorney requested the checks my health insurance said they wanted to be paid back. They paid $23,700 and my attorney negotiated them down to $15,000. My attorney's fees are 1/3 of what comes in. Since my health insurance is taking $15,000 the amount that I am receiving has changed but my attorney's has not. I was originally going to get $33,333.33 and my attorney was going to get $16,666.67. Now my attorney says I am getting $18,753.33. So why am I not getting a third of $35,000, which is what is left after what is left after the $15,000 is paid to my health insurance?
This is something best discussed with your own attorney, but many contingency fee arrangements are some % of the gross amount received not the net amount. So, the fee would be 1/3 of $50,000, not 1/3 of $35,0000. Ultimately, though, you should discuss your concerns with your own attorney and perhaps ask him or her to go over the employment documents if you have a dispute with the fee.
T. Shawn Howard
MAGINNIS LAW, PLLC
Most retainer agreements state the fees are calculated before any liens or reimbursements. Consider yourself lucky that you didnt have a self insured ERISA healthplan that was claiming its full amount and was unwilling to negotiate a reduction at all. The US Supreme court just found in favor of such a plan and indicated the plan if it contained certain laguage, could insist on full payment, even if the member had to pay his atty so that there wasnt enough left to the member to pay the plan back! The member could end up in worse position having pursued the responsible party! Big companies and health plans have won again at the cost of the rest of us.
I recommend that you review the contingency fee contract that you originally signed with your attorney. Most of them discuss that the attorneys fee will be taken on the gross settlement. I would make an appointment with your attorney and have him/her explain the contingency fee contract and the manner in which the fee was calculated. Given the numbers you are discussing, the fee was taken from the gross settlement of $50,000, all expenses were paid (including medical), and you were tendered the remainder. I hope this helps.
Settlement breakdowns from an auto accident are based upon the fee agreement with attorney and can have additional caveats or issues. Commonly the attorneys fees are taken out as well as the expenses. If there are liens against the case by health care providers or from employer provided health insurance, then your net recovery can be affected. Call your attorney and go over the breakdown of the auto accident settlement step by step.
Avvo Email - Have no legal fearThis is what I think your scenario is:
You had a policy limits case in a case where policy limits are only $50,000. You had approximately 23,000 in medical bills, paid by your insurance, not the at-fault party’s.
So, out of the 50,000 you are responsible for attorney’s fees, which is 1/3 or 16,667, and the remaining portion is yours, but you have to pay back the lien for medical bills that were paid on your behalf. Your lawyer is obligated to make sure that liens are satisfied before releasing the money from his/her trust account.
This is a prime example of why it is a good idea to have uninsured/underinsured coverage, because you cannot rely on other driver’s having anything more than the bare minimum of insurance.
This response is general legal information. To the extent it is advice, it applies only to North Carolina, the state where Locke Milholland is licensed to practice law. The response applies only to the limited facts presented. Additional or different facts may result in a different response. This response does not and is not intended to create an attorney client relationship.
This should be specifically spelled out in your attorney client agreement, and explained by your attorney. It is not atypical for a medical lien holder to ask for reimbursement. However, there are good laws to reduce any claim they may have (i.e. made whole rule etc.) The attorney should explain all this to you but the overall answer is that it is typically addressed by the attorney client contract.
I agree with the other answers here that you retainer agreement should answer your question by defining what the contingency fee is charged against. However, you may want to consider looking at this issue from another angle. You say that you didn't recover $50k but rather only recovered $35k because your health insurance company has a right of reimbursement. But, that right of reimbursement is out of your recovery. If you went to trial and lost and recovered zero dollars, then you would not have to pay any reimbursement to your health insurer. Had you never pursued a third party claim in the first place, then you would not have to pay a reimbursement. It is because your attorney recovered $50k for you that your health insurer is getting reimbursed. The problem is not with your attorney but rather the health insurance company adding a reimbursement proviso that you may not have even known about when the health insurance plan was selected. Another issue to consider is the attorney obtained $50k for you by fighting with the casualty carrier but then fought again to increase your net recovery by $8,700. Yet, the attorney is not charging you a third of the $8.7k even though it was a separate fight.
I understand that you may think this reimbursement is unfair since you paid the premiums to purchase the health insurance. If they are getting their money back, are they refunding your premiums? - Not Gonna Happen' Now consider this, you spend your hard earned money on health insurance and you also buy car insurance and also pay extra for uninsured motorist coverage. After protecting yourself this way, you get badly injured by an uninsured motorist. When you get a recovery from your own car insurance company, your health insurance company steps in with the same reimbursement demand. You just became the unwitting reinsurer of your health insurance company for the very risk you spent good money on to protect yourself! This loophole needs to be closed by California legislation. Fortunately, relative few people get injured in such accidents. Unfortunately, only those that do learn about the need for this area to be legislated.
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Without first reading your retainer agreement its difficult to say for certain. Please read it thoroughly. Usually in Florida, the attorney will get 33 1/3 percent of the settlement funds prior to suit being filed on a personal injury claim and prior to paying any medical expenses from the actual settlement. This amount does not decrease based upon medical bills outstanding. This amount is completely seperate and unaffected by medical bills or other expenses related to the case. The fees are soley based off the actual settlement.
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