When you win a car accident or other personal injury case in court, the judge issues a judgment ordering the defendant to pay the amount the jury awarded you. A judgment is legally enforceable, meaning that if the defendant fails to pay you what he or she owes in a reasonable amount of time, you can place a lien on his or her assets in the amount of your judgment and then force a sale of those assets to pay it.
The more likely scenario, however, is that the defendant, or more probably his or her insurance company, will send your lawyer a check in the amount of the judgment. Why doesn’t the check come to you directly? Because other people and entities are probably entitled to receive part of it, and your lawyer has the duty to distribute the judgment proceeds appropriately.
Typical Payout Procedure
When your lawyer receives the check, he or she deposits it into the trust account maintained by his or her law firm. All car accident lawyers who receive money on behalf of others, must have such an account in addition to their firm’s operating or other accounts where they deposit the money they’ve earned as legal fees.
Your lawyer then disburses the judgment funds as follows:
- Pays your outstanding medical and other bills associated with your injuries
- Pays any outstanding costs of litigation, such as expert witness fees, deposition fees, court filing fees, etc.
- Pays himself or herself the contingency fee called for in the employment contract between you and him or her
- Pays you the balance of the judgment
Virtually all personal injury lawyers charge contingency fees rather than hourly fees. This type of fee makes it easier for you to obtain the services of an experienced personal injury attorney without having to pay him or her anything up front. Instead, your attorney agrees to wait for payment until he or she wins your lawsuit, either by settlement or jury trial. In the extremely unlikely event that he or she is unable to obtain compensation for you, you owe him or her nothing.
Each PI attorney sets his or her own contingency fees. Some lawyers charge a flat percentage, usually between 33% and 50%, of the ultimate settlement amount or judgment, based on the time and amount of work they estimate it will take to win your case. Other lawyers take a bifurcated approach, charging, for example, 20% if they settle the case and 40% if they have to conduct a full-blown jury trial.