Paying Your Attorney Out of a Rear-End Settlement

Attorney Answer

Almost certainly yes. A contingency arrangement means you pay nothing up front — not that you pay nothing. If money comes in, the fee comes out of it. What you owe, and how it is calculated, is set by the written agreement you signed when you hired the firm, and that document is the real answer to your question. If you do not have a copy, get one this week.

California regulates written contingency fee agreements in injury cases, including what they must disclose and the client's right to a copy. Those requirements are set by statute, so ask your own attorney to walk you through your agreement, or ask another local attorney to read it with you. What follows is what these agreements typically contain, so you know what to look for.

Fees and costs are usually two different things. The percentage is the fee. Case costs — medical records, filing and service, deposition transcripts, expert opinions — are often advanced by the firm and reimbursed out of the recovery. Whether those costs come off before the percentage is calculated or after it changes your net meaningfully, so find the sentence in your agreement that says which. Many agreements also step the percentage up if a lawsuit is filed or if the case is tried, which is one practical reason "when I win" and "when it settles" are not the same event.

Liens are the part that surprises people. Even after the fee and costs, medical providers and health programs may have to be repaid from the recovery. If any of your treatment was paid by Medi-Cal, Cal. Welf. & Inst. Code § 14124.71(a) provides: "When benefits are provided or will be provided to a beneficiary under this chapter because of an injury for which another party is liable… the director shall have a right to recover from such a party or carrier the reasonable value of benefits so provided." That is not a claim-killer. There are statutory limits on what may be recovered, and it reduces your net rather than your right to a recovery — but you want it identified early, not at the end.

As for the claim itself, a rear-end case is normally the strongest kind. Cal. Veh. Code § 21703 provides: "The driver of a motor vehicle shall not follow another vehicle more closely than is reasonable and prudent, having due regard for the speed of such vehicle and the traffic upon, and the condition of, the roadway." Most such claims resolve by settlement rather than by a trial verdict.

What you can do

1. Ask your attorney's office for a copy of the signed fee agreement today if you do not already have one. This is a routine request.

2. Read three things in it: the percentage, whether the percentage changes if suit is filed or the case is tried, and whether case costs come off before or after the fee is calculated.

3. Ask, in writing, for a current list of the costs the firm has advanced and of any medical liens or reimbursement claims the firm knows about.

4. Tell your attorney now if any of your treatment was paid through Medi-Cal, a managed-care plan, or an employer health plan.

5. Ask for a written settlement statement before you sign anything at the end, showing the gross recovery, each deduction and your net, and ask about any line you do not understand.

6. If you cannot get straight answers, ask another local attorney to review the agreement. A second opinion on a fee agreement is ordinary and is usually quick.

Most lawyers offer a brief initial call at no cost, and a few minutes on your specific facts with someone who practices in your area is worth more than any general guidance, including this page.

⏱ Time limits apply. Cal. Code Civ. Proc. § 335.1 generally allows two years for a claim for injury or death, and Cal. Code Civ. Proc. § 338(c)(1) generally allows three years for damage to a vehicle. Because you are represented, tracking those dates is your attorney's job — but ask them directly what date they are working to, and understand that if you ever part ways with the firm the deadline is yours again. Where those periods stand depends on facts a page cannot see, so have them reviewed against your own file rather than counted from the calendar.