What's the Common Billing Practice for Personal Injury Attorneys?
(Sherman Oaks, CA)
My friend was rear ended badly in Sherman Oaks, CA on Riverside drive. She had an old car that rides low. The person who hit her was in a high truck. My friend's car was totaled - car frame bent from back to front. She was paid $3,000 for the car.
My friend had 3 months of physical therapy, and had soft tissue injuries to her neck which still hurts after therapy. Her attorney said the case can settle for $11,000.
The attorney gets $3,660, medical bills come out of $11,000 settlement (about $3,400 in medical bills) and my friend only gets $3,900 out of an $11,000 settlement.
It just seems wrong to me that the personal injury attorney gets about as much as the injured client. Is this common practice?
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ANSWER for "What's the Common Billing Practice for Personal Injury Attorneys?":
Laura (Sherman Oaks, CA):
You can't blame the attorney for the amount of the settlement. Too many victims of personal injury accidents seem to think their injuries should result in a "profit". Others believe a personal injury accident is like winning the lottery. It isn't either one.
Attorneys set a fee before the case begins. Their fees for personal injury cases are usually between 33.3% to 40% of the settlement amount. You should understand if the attorney lost the case she would get nothing and would have worked all that time for nothing - wasted time.
Contingency Fee Agreements have existed for almost 100 years. You can be assured your friend's attorney, like other reputable personal injury attorneys, has tried cases where they put in hundreds of hours of time, including going to trial, only to end up with what in legal jargon is called a "goose egg" - meaning nothing.
Before your friend's attorney undertook representation she presented your friend with a clear retainer agreement. Different attorneys may refer to the agreement in different ways, but it is in essence, a "Contingency Fee Agreement".
Your friend knew at the outset of the case what her fee would be. She could have decided not to retain the attorney, and have represented herself. You can be confident though if she did there is a good possibility she may have had to settle the case for the amount of the medical bills and no more. That's because a person representing themself has little leverage.
When an attorney is representing a client, if the insurance company won't settle the case for the amount the attorney believes is fair, the attorney can not only threaten but actually go to trial. As a result insurance companies almost always settle for amounts much higher with attorneys than they do with "pro se" victims.
Your friend would have almost no leverage on her own. The claims adjuster would immediately know your friend has no leverage and as a result might offer her barely enough to pay her medical bills. It happens all the time. Once adjusters make their offer to people who represent themselves their attitude is often, "Take it or leave it".
Without an attorney your friend would be left "out in the cold"...it's doubtful she has the skill and abilities to take on an insurance company in trial. She can review the case with her attorney. The attorney will explain why the settlement is what it is.
The above is general information. Laws change frequently, and across jurisdictions. You should get a personalized case evaluation from an attorney licensed in your state. Find a local attorney to give you a free case review here, or call (888) 647-2490.
Best of luck,
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