Do Lawyers Get Paid Before Medical Bills?
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Do Lawyers Get Paid Before Medical Bills?

In nearly all personal injury claims, your lawyer is paid a percentage of the final settlement or verdict that is awarded. This is known as a “contingency fee” arrangement and is spelled out in a contract that you and your personal injury lawyer both sign. 

A contingent fee contract enables cash-strapped plaintiffs the ability to pursue legal action without putting up any of their own money. If your personal injury lawyer is unable to secure a settlement or loses at trial, you would not be responsible for paying any attorney fees. 

Contingent fee arrangements for personal injury claims 

The fee agreement can range from 25% to more than 40%, depending on the nature of the case, but it will stipulate the exact percentage of legal fees being charged so there is no misunderstanding.  

Can your lawyer take out his or her fees from your settlement before your medical bills are paid? Technically, they can, but it doesn’t always happen. The attorney’s “cut” or agreed-upon portion of your personal injury settlement proceeds typically applies to the whole recovery, which would include reparations for medical and hospital expenses.  

Attorneys who operate on a “No Recovery No Fee” basis are entitled to their fees and litigation expenses from the gross recovery before the client is paid. But this doesn’t take into account plaintiffs who have medical “liens” on their pending settlements. 

Medical liens in California 

The law in California allows health care providers to grant a “lien” against your personal injury claim, in an effort to ensure they will be paid any outstanding medical bills. This lien authorizes the automatic payment of your bills from any award or settlement received. 

Doctors and other medical practitioners will generally grant a medical lien for patients who meet one of the following criteria: 

  • Patients who do not have the economic resources to cover their insurance deductible  
  • Patients who have no private or employee-based health/medical insurance 
  • Patients who do not have Medi-Cal or Medicare coverage 
  • Patients who cannot afford to pay their medical expenses during the litigation 

A medical lien is a legally binding contract that is commonly used in auto accident cases and personal injury claims. While they can be beneficial, be sure to have your lawyer explain the terms and review the language thoroughly before you sign. 

What happens if the case is unsuccessful? 

Sometimes settlement negotiations are unfruitful, and you may be urged to take your case before a jury. Trials can be unpredictable, and if the case is unsuccessful, you would still be on the hook for all medical liens and outstanding bills. If the case is lost, and your attorney is working on contingency, the legal fees should be waived, as outlined in your contract.  

Your physicians and other medical providers would legally be able to collect on your debt per the lien agreement. However, most hospitals and health care providers are open to working out a payment plan that is practical for both parties. 

In some cases, your attorney may even be able to negotiate a reduced payment schedule with your medical lien providers. 

Experienced advocacy for personal injury victims 

Remember that all attorney fee agreements in personal injury matters must be specified in a written contract. In most cases, your legal counsel will deduct their out-of-pocket litigation costs and attorney fees after your medical bills have been paid. 

For more information about filing a personal injury lawsuit in California, or to schedule a free case review, contact Ellis Injury Law today. We handle our cases with care and dedication, and our skilled attorneys have secured over $350 million for clients. 

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