After a Crash, Who Gets Paid First: The Lawyer or the Doctor?

Once you have accepted a settlement from the insurance company for your damages in an accident and signed a release, you will be handed a check for the full amount.

Normally, the settlement does not provide you with a breakdown of what has to be paid out of those funds. It is possible that you will have medical bills and attorney fees owed once you are handed the funds.


Lawyer Fees

In some states, attorney fees are deducted from the settlement before you receive it. Many times, the insurance company delivers the check to your attorney who places it in an escrow account. They then deduct their fees and provide you with the amount that is left. You can refer to the contract you signed with the attorney to determine how much of the settlement must be paid to them.


What Is Contingency Fee For?

If your attorney was working on a contingency fee basis, you may need to ask them what is the contingency fee? It can result in needing to pay your attorney a large sum from your settlement. This is because a lawyer who takes this type of case is taking it based on the “contingency” that they win.

In other words, if you had not been successful in obtaining a settlement or judgement, the lawyer would have received no payment. Normally, a contingency fee is 25 to 50% of the settlement. The amount your lawyer will receive may also include fees they paid upfront, such as costs for getting medical records, filing fees, and more.


Medical Bills

Once your attorney has taken the fees they are owed, you will need to pay your medical bills. In some states, a doctor can place a lien on your settlement proceeds so that the check is issued in both your name and the name of a doctor who has filed a lien.

Insurance companies who have paid your medical costs may also file a lien to recover amounts obtained in a settlement. It is possible that you or your attorney can try to reduce medical costs by working with a doctor or insurance company if your settlement is small, but this must be done before the settlement is finalized.


Remaining Funds

After you have paid your attorney and your medical bills, the remaining funds are yours to do with as you wish. It may be tempting to handle your claim on your own in order to avoid paying attorney fees, but this is not usually recommended. The Insurance Research Council found that people who hire an attorney in a personal injury case receive almost four times more than those who resolve the case on their own. In addition, 85% of the cases that are settled out of court had an attorney representing the plaintiff.

If you or a loved one has been injured in an accident, it is critical that you hire an attorney to guide you through the process of getting the compensation you deserve. Statistics indicate that hiring an attorney could help you receive a higher award than if you tried to fight the insurance company on your own.

Hiring an attorney does not mean you will have to go to court as statistics also show more cases are settled out of court with an attorney than they are for those who try to handle the claim on their own. Most lawyers offer a no obligation consultation by calling or filling out an easy online form to see how they may be able to help you get the settlement you deserve.