How Is A Settlment Split Up?

"How Are Settlements Split in Personal Injury Cases?" Ever wondered what happens to a settlement after it's won? It's not as simple as pocketing the full amount. Attorney Chris Parks breaks down how settlements are divided, explaining where the money goes—legal fees, case costs, expert witnesses, and liens for medical bills. If you're pursuing a personal injury case, understanding this process is crucial. Watch the full video to learn what to expect when navigating your settlement. #ChrisParksLaw #Boulder

How Is a Settlement Split Up?

Okay, so how is a settlement split up? What I mean by that is, if you've seen lawyer ads on TV, they’re often about people who were injured, received a lot of money, and always look perfectly normal. Yet, they’re telling you they got a million dollars. At the end of any case, even if the person is awarded a million dollars, there’s always a split.

How Settlements Are Divided:

  1. Attorney Fees:
    A portion of the settlement goes to the lawyer. This is often around one-third of the recovery.
  2. Case Costs:
    The costs of the case also need to be paid back. In states like Colorado, Texas, and Louisiana—where I’m licensed to practice—these costs can be significant.
    • For example, in a complicated case involving a defective product, I would need to hire an expert to testify about the product’s defectiveness.
    • Additionally, the opposing side will hire their own expert to counter our expert’s findings.
    • If there are severe injuries with long-term effects, another expert might be required to calculate the present-day cost of medical care for the next 30, 40, or even 50 years.
    • For cases involving wage earners or students with a promising future, an economist may need to testify about the value of lost wages or potential future earnings.
  3. These expenses add up quickly. Many lawyers, including myself, have had cases in the last decade where expert expenses reached tens of thousands of dollars, sometimes nearing $100,000 before trial even begins.
  4. Liens and Repayments:
    If the injured person had medical bills paid by the Veterans Administration (VA) insurance or another provider, those costs must be reimbursed before the injured party can be paid. This is called a lien.
    • For example, the VA has a right to be repaid for any medical costs it covered, and federal law ensures they get reimbursed first.

What Happens at the End of a Case?

When you hear someone say, “I got a million dollars,” it doesn’t mean they walked away with that amount in their pocket. It likely refers to the total settlement amount. After deducting attorney fees, expert costs, and lien repayments, the remaining amount is what they actually receive.

This process can be difficult and confusing, which is why your lawyer should explain everything to you clearly:

  • They should outline the costs involved when you start the case.
  • They should keep you updated as the case progresses.
  • They should explain any delays, such as negotiating lien repayments with federal agencies or other entities.

I’m Chris Parks. I’m licensed in Colorado and live in Boulder. Thanks for listening!

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