What this guide is best for
Direct answer: Use this before you sign a fee agreement, not after a settlement figure is announced.
Best used when: The fee percentage is only the first deduction. Case expenses and liens come out too.
From gross settlement to what you receive
Key point: The fee percentage is only the first deduction. Case expenses and liens come out too.
What a good provider should make clear: A written disbursement estimate showing fee, expenses, liens and net, before you agree to anything.
Common mistake: Reading the settlement headline as the amount arriving in your account.
Questions to ask: Can you show me a worked example of the disbursement on a settlement of this size?
From gross settlement to what you receive
Opening intent: walk the money from gross settlement down to what reaches the client
- Start: Use this before you sign a fee agreement, not after a settlement figure is announced.
- Then compare: The fee percentage is only the first deduction. Case expenses and liens come out too.
- Watch for: Reading the settlement headline as the amount arriving in your account.
- Before you book: Can you show me a worked example of the disbursement on a settlement of this size?
Quick answer
A settlement figure is a gross number. What reaches you is that number minus the fee, minus case expenses, minus any liens.
Ask for a worked disbursement example before you sign a fee agreement. Every one of these deductions is knowable in advance.
Timing
The fee agreement is signed at the start, and it governs everything afterwards. That is the moment to ask these questions, not later.
Statutory deadlines to file vary by state and are often shorter than people expect. If you are near one, treat it as urgent.
Early is also when medical documentation is easiest to gather, which is the other reason not to wait.
The order the money comes off
| Deduction | What it is | What to establish in writing first |
|---|---|---|
| Contingency fee | A percentage of the gross recovery | The percentage, and whether it rises if the case is filed or tried |
| Case expenses | Filing fees, records, experts, depositions, imaging | Whether expenses come off before or after the fee is calculated |
| Medical liens | Providers or insurers claiming repayment from the settlement | Which liens exist, and who negotiates them down |
| Outstanding balances | Unpaid bills owed directly to providers | What remains unpaid and at what amount |
| Net to you | What is left | A worked example at a realistic settlement figure |
Whether expenses are deducted before or after the fee changes the arithmetic materially. Get that answer in writing.
A cost that is actually published
Most case expenses are not published anywhere. Court filing fees are.
In federal district court, the administrative fee is "$55" for filing a civil action, alongside the $350 statutory fee set by 28 U.S.C. § 1914(a) — $405 in total (District Court Miscellaneous Fee Schedule, effective 1 December 2023).
Most personal injury cases are filed in state court, where fees are set locally and vary. Ask your attorney for the figure in your county.
Questions to ask before signing
- What is the fee percentage, and does it change at any stage?
- Are expenses deducted before or after the fee?
- Who advances expenses, and what happens if we lose?
- Which liens do you expect, and who negotiates them?
- Can I see a worked disbursement on a settlement of this size?
Common mistake: asking about the percentage and nothing else.
Tax treatment, and what not to assume
The IRS publishes this directly. For personal physical injuries or physical sickness, where you did not previously take an itemised deduction for related medical expenses, "the full amount is non-taxable" (Publication 4345, rev. 9-2023).
But if you did deduct those medical expenses in a prior year, you must include that portion in income to the extent the deduction gave you a tax benefit.
Do not assume the whole settlement is tax-free, and be careful with any allocation you have not read. Slow down before signing a release that allocates the settlement between categories.
What to do next
Ask for the worked disbursement example in writing. If the answer is vague at the start, it will not get clearer at the end.
Educational only. Not legal advice. No endorsements or rankings.