One reader's working-out of how an injury claim moves from the first insurer phone call to the signed release, including the arithmetic on fees, costs and medical liens. Nothing here is legal advice for a particular case.
The number an adjuster says out loud is a gross figure, and almost nobody receives it. Between that number and the check in your name sit four deductions, taken in a fixed order that the fee agreement sets before the case ever settles: the attorney's percentage, the case costs advanced during the work, the medical liens and subrogation claims held by whoever paid your treatment, and any unpaid balances owed directly to providers who treated you on a letter of protection. A careful reader checks the order, not just the percentages, because the order changes the arithmetic by thousands.
Gross first or costs first, and why the sequence is worth real money
Take a $90,000 settlement with a one-third fee and $6,000 in case costs. If the fee is calculated on the gross, the attorney takes $30,000, costs of $6,000 come off next, and the client side of the ledger holds $54,000 before liens. If the fee is calculated after costs are reimbursed, the fee base is $84,000, the fee is $28,000, and the client side holds $56,000. Same case, same work, $2,000 apart. The fee agreement will say which method applies, usually in a single sentence that is easy to read past.
The same claim, settled at the adjuster's desk or filed in court
Most contingency agreements are tiered. A common structure is one-third before a lawsuit is filed and forty percent after, sometimes with a further step at the eve of trial or on appeal. Suppose the pre-suit demand resolves at $90,000: fee $30,000, costs $1,200 for records and a police report, leaving $58,800 before liens. Suppose instead the insurer holds at $60,000, suit is filed, and the case settles at $150,000 after two depositions and a treating physician's report. Fee $60,000, costs $16,000, leaving $74,000 before liens. Filing won, but by less than the headline gap suggests.
That comparison is the one to run before agreeing to file. Litigation costs are real cash, spent on court filing fees, deposition transcripts, expert review, mediation, and sometimes a day rate for a physician's testimony, and they come out of the recovery whether or not they change the outcome. A reader who asks for a written cost estimate at the point of filing, rather than a general reassurance, can see the breakeven: how much larger the settlement has to be, at the higher fee tier, to leave more in hand than the pre-suit offer already on the table.
Liens are the deduction most people learn about last
Health insurers, Medicare, Medicaid, workers' compensation carriers, hospitals with statutory lien rights, and providers holding a letter of protection all have a claim on settlement proceeds for what they paid or are owed. Employer-sponsored health plans, which the Department of Labor oversees under federal benefits law, often assert the strongest reimbursement rights, and the terms sit in the plan document rather than in state law. A $22,000 asserted lien is not a $22,000 deduction, though. Liens are negotiated down routinely, on grounds that include the attorney's work in creating the fund and the limits of available insurance coverage.
Ask how lien negotiation is handled and whether it is treated as part of the contingency fee or billed separately, because both arrangements exist. Ask, too, for the reduction to be documented: a final lien letter stating the accepted amount, not a verbal figure. On the $150,000 example, a $22,000 plan lien reduced by one-third for procurement costs becomes roughly $14,700, and the net check moves from about $52,000 to about $59,300. That negotiation is often worth more per hour of effort than any other stage of the case.
What happens to the costs if the case loses
A contingency fee means no fee is owed on a loss. Costs are a separate question, and the agreement answers it in one of two ways: the firm absorbs advanced costs on an unsuccessful case, or the client remains liable for them. Many firms write the first version, some write the second, and a few write the second and then waive it in practice. Read the clause and ask directly what has happened in past losses. Separately, ask whether a defense cost award is possible after a rejected offer of judgment, since a handful of states allow it.
Run the arithmetic on paper before signing, with the firm's own numbers filled in: fee base, tier trigger, projected costs at filing, known liens and their likely reductions. A firm that expects the question will have the figures ready, and the conversation takes twenty minutes.