What Percentage of the Settlement Does My Personal Injury Lawyer Get?

by Priscilla
(Deptford, NJ)

I was involved in an accident. The other party's insurance company is about to make settlement. My personal injury attorney is quoting me more than half of the settlement as his payment. This doesn't sound right.

What percentage of the settlement is a New Jersey lawyer supposed to receive? Is he/she allowed to take more than the client? Thanks.

Visitor Question:
Disclaimer: Information provided in our response is NOT formal legal advice. It is generic legal information based on the very limited information provided. Under no circumstances should the information in our response, or anywhere else on this site be relied upon when deciding the proper course of a legal matter. Always get a formal case review from a licensed attorney.

ANSWER for "What Percentage of the Settlement Does My Personal Injury Lawyer Get?":

Priscilla:

The State of New Jersey does not have any laws related to attorney compensation for personal injury cases. The New Jersey Bar Association Canon of Ethics permits contingent attorneys’ fees in Personal Injury cases.

It is permissible for an attorney to charge anywhere from 33% up to 40%, depending on whether the case is settled before or after a lawsuit has been filed. Your facts do not mention whether suit was filed.

It is not uncommon, nor inappropriate for a client’s net settlement to be less than 50% of the gross settlement. It is doubtful your attorney has exceeded her 33% or 40% fee. What probably occurred is best explained by the following example...

Let say it became necessary for your attorney to file suit against the driver. Doing so is not uncommon as it “tolls” or protects you from defaulting on the 2 years statute of limitations period within which your case must be settled or suit filed. As a result of filing suit the attorney’s fees escalated to 40% or $40,000 dollars.

The gross settlement is $100,000 dollars.

The unpaid medical bills, copy costs, expert witness fees and other costs necessarily incurred in the prosecution of a client’s case come to $12,000 dollars (this is subtracted from the gross settlement amount BEFORE your lawyer takes his fee).

Your attorney's fee is 40% or $40,000 dollars.

Your final settlement funds would therefore come to $48,000.

If you had chosen not to be represented by a skilled Personal Injury Attorney there is a substantial probability your net settlement might have been well below $48,000.

Dealing with insurance companies and their Claims Adjusters is a job for a skilled professional. The insurance company’s job is to pay as little as possible. When a person represents themselves and an insurance company offers a settlement amount well below what a victim feels is fair the insurance company knows the victim has no leverage. What is an unrepresented victim going to do if she disagrees with the settlement offer? There is no “Complaint Department.”

Their attitude basically is “Here is our offer. Take it or leave it.” Expecting an insurance company to offer an amount much higher than just paying your medical bills is naïve.

There is no law, statute, rule or regulation in the State of New Jersey which requires an insurance company to offer ANY amount. Without legal representation you should not be surprised if in your case the insurance company paid your medical bills and no more.

Best of Luck,

Law Guy

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