How Much of Your Injury Settlement Do You Really Receive?

We've all seen the advertisements for personal injury and wrongful death attorneys who "won't charge you a dime out of pocket." All cases are handled on a contingency basis. And when you're injured, out of work, and expenses are mounting, hearing an ad like that may feel like you've been thrown a life preserver. After all, how else could you possibly afford competent legal representation for your injury or wrongful death claim without some sort of extension of credit?

Contingency fees are an enormous incentive for your attorney—who only gets paid if you do—to do well. However, because your lawyer is assuming the risk of not being paid, he or she must also command a larger portion of the award to make sure that his or her practice remains viable. Many victims of accidents tend to focus on the gross potential amount of the award or settlement and don't realize until it's too late that they may not be adequately compensated once the attorney, doctors, and whoever else receives their share.

When personal injury lawyers calculate damages for a claim, they include things like:

• Medical Expenses
• Lost Wages
• Future earnings adjusted for diminished capacity
• Other expenses resulting from the accident
• Pain
• Suffering
• Rehabilitative expenses

Naturally, some of these calculations are subjective. For instance, the defendant's attorney is likely to come in with a much lower estimate for something that's difficult to quantify monetarily, like pain or suffering. Ultimately, the amount will either be negotiated between the two parties (settlement) or the Georgia courts will make the determination (award). Once that final number is reached and the settlement or award is paid, your attorney's contingency fee is deducted.

For example, suppose you were injured in an accident that was not your fault and missed a year of work. You contracted an attorney who works on a contingency fee of one-third the gross amount of your award or settlement. If you were to receive $150k from the defendant, that would mean that the attorney's fees would be $50k, which leaves you with $100k. However, in addition to the attorney's fees, your insurance company may be looking for compensation for the expenses that they've incurred (vehicle replacement, medical bills, et cetera). After all, part of your claim is medical expenses, and if you're insurance company has already paid for some of those expenses, they are going to want to be reimbursed for their outlay. Things like this can significantly reduce the amount of your settlement.

In order to prevent receiving a shock when your settlement arrives, before accepting any wrongful death or personal injury settlement, you should ask your attorney what the final amount of your compensation would be if you were to accept an offer. Only then can you make an informed decision about the adequacy of the amount.