The Settlement Statement · Brooklyn, NY
Nobody wants to ask it out loud. So let me answer it the way I'd answer it sitting across my desk on Coney Island Avenue — with the actual arithmetic, line by line, and no dodging.
The short answer
How much of your settlement you actually keep depends on three subtractions: my fee, the money advanced to build the case, and any lien that has a legal right to be repaid. Most of my clients walk away with somewhere between half and two thirds of the gross number. In a New York car accident case, your medical bills usually are not one of the subtractions, because No-Fault already paid them. And here's the part almost nobody knows — your regular health insurance generally cannot touch your settlement at all. State law blocks it.
People ask me this question in a whisper. They've been sitting with it for months, and by the time it comes out it's usually phrased as an apology — "I don't want to sound greedy, but…"
You're not being greedy. You got hurt, you missed work, and somebody is finally going to write a check. Wanting to know what's left of it is the most reasonable thing in the world. The problem is that most people never get a straight answer until the day they're already signing papers, and by then it's too late to ask questions.
So let's do it now instead. I'm going to walk you through a real closing statement — that's the itemized sheet you sign at the end of every case — and show you where every dollar goes.
The four things that can come out of a settlement
That's it. Four. Anything else somebody tells you is coming out of your money deserves a hard second look.
- The attorney's fee. In almost every New York injury case this is a contingency fee — a percentage of what's recovered, and nothing at all if there's no recovery.
- Case expenses. The money the office fronted to build your case: filing fees, medical records, expert reports, deposition transcripts.
- Liens with a statutory right of repayment. A short list: Medicare, Medicaid, self-funded employer health plans, and workers' compensation carriers.
- Unpaid bills you personally owe that nobody else covered — which, in a car accident case, is usually a much smaller pile than people fear.
Notice what isn't on that list. Your Fidelis card. Your Healthfirst plan. The union plan. In most cases those payers have no claim on your settlement whatsoever, and I'll get to why in a minute.
A $100,000 case, line by line
Here's the sheet. These numbers are invented for illustration — a real one depends entirely on your case — but the order of operations is exactly how it works. That order is where people get surprised.
That last line is the whole reason I wrote this article. The fee is a fixed, knowable number the day you sign your retainer. The liens are not. Liens are the negotiable part of your settlement, and they're where the real money is won or lost after the case is already "over."
Two lawyers can settle the identical case for the identical dollar and hand you checks thousands apart. The difference is entirely in what happens after the handshake.
What "one third" really means in New York
The standard contingency fee in a New York personal injury case is one third. That part you've probably heard. What almost nobody explains is one third of what, and the answer moves real money.
Under the court rules governing attorney fees in injury cases, the percentage is normally figured on the net sum recovered — meaning case expenses come off the top first, and the fee is calculated on what's left. New York's statute governing malpractice fees uses the same approach, computing the percentage on the net sum after expenses and disbursements are deducted.
On our $100,000 case that ordering is worth $800 to you. On a million-dollar construction case with $80,000 in expert costs, it's worth over $26,000. Same fee, same settlement, different arithmetic.
Every retainer agreement has to spell out how the fee is computed. Find that paragraph. If it says the fee comes off the gross number with expenses deducted afterward, you should be asking why — before you sign, not after. Any lawyer who gets annoyed by that question is telling you something useful.
One more thing on fees, because people brace for it: if there's no recovery, there's no fee. That's not a marketing line, it's the deal. I've closed cases where I ate every dollar I put in. It's the price of taking the risk instead of putting it on you. I go into more detail on that in what it costs to hire a car accident lawyer.
Case expenses, and what they aren't
Expenses are the out-of-pocket money it takes to actually build a case. In a straightforward Brooklyn car accident, they're modest:
- Court filing fees — the index number in Kings County Supreme Court, requests for judicial intervention, motion fees.
- Medical records and films — every hospital, clinic, and imaging center charges for copies, and there are always more of them than you'd think.
- The police report and any crash reconstruction you need.
- Deposition transcripts — the court reporter bills per page, and depositions run long.
- Expert reports and testimony — the big one. A treating surgeon or a biomechanical expert can cost thousands. This is what separates a $2,400 case from a $60,000 case.
What expenses are not: they are not a second fee. They're reimbursement of real money already spent, and you're entitled to see the receipts. Ask for the itemization. Any office should hand it over without blinking.
Who can legally take a bite — and who can't
This is the section I most wish people read before they call me, because the assumption almost everybody walks in with is wrong.
The assumption goes: "My insurance paid my medical bills, so when I get money, they get paid back." Reasonable. Also, in New York, usually incorrect.
In 2009 New York passed General Obligations Law § 5-335. It says that when you settle an injury claim, the law conclusively presumes your settlement doesn't include compensation for medical costs an insurer already paid — and that insurer therefore has no lien and no right of reimbursement against your money. Plain English: your health plan doesn't get to stand in line behind you.
The statute carves out payers with a statutory right of repayment. That's the short list that actually can collect:
| Who paid | Can they collect? | What actually happens |
|---|---|---|
| Private health plan Fidelis, Healthfirst, Empire, most union plans | Usually no | Blocked by GOL § 5-335. They still send scary letters. The letters are not the law. |
| No-Fault (car accident) | No | No-Fault pays your providers directly and takes nothing from your settlement. |
| Medicare | Yes | Federal law makes its payments conditional and repayable — but the demand gets reduced for the cost of recovery. |
| Medicaid | Yes | A statutory lien, but one that is subordinate to the attorney's lien and can be compromised. |
| Self-funded employer plan ERISA — the employer, not an insurer, is really paying | Often yes | Federal law can override the state protection. Whether a plan is truly self-funded has to be verified, not assumed. |
| Workers' compensation carrier | Yes | A lien on the third-party recovery, reduced by its fair share of the litigation costs. |
Medicare: the demand is a starting number
Medicare pays accident-related care conditionally and is entitled to be paid back. But it doesn't get to collect as if it did the work. Federal regulation 42 CFR § 411.37 requires Medicare to reduce its recovery to account for the cost of procuring the settlement — the attorney fee and expenses. CMS confirms in its own guidance that it takes the beneficiary's procurement costs into account when it issues a demand.
On top of that, the first demand routinely includes treatment that has nothing to do with your accident. The knee you hurt on Flatbush Avenue is in there. So is the diabetes management and the dental visit. Every unrelated line gets disputed and pulled out, and that's before you get to formal appeal rights.
Medicaid: the lien sits behind the attorney's lien
New York's Medicaid lien comes from Social Services Law § 104-b. Two things in that statute matter to your check. First, the lien is expressly subordinate to the lien of the attorney who obtained the recovery. Second, the amount is negotiable — and when a settlement is capped by a small insurance policy and doesn't come close to making you whole, that's the argument for compromising it down.
That's how a $12,000 demand becomes $6,000. Not magic. A phone call, a letter, and knowing the lien is subordinate before you pick up the phone.
Workers' comp: your case pays its share of the freight
If you got hurt on the job and later sued a third party — the driver who hit your work van, the contractor who left the hole in the floor — the comp carrier has a lien under Workers' Compensation Law § 29. But the statute says that lien attaches only after deducting the reasonable and necessary expenses, including attorney's fees, of getting the recovery. New York courts require carriers to bear their equitable share of what it cost you to win. On a car accident case, the comp lien also doesn't reach the first $50,000 of No-Fault benefits.
This comes up constantly in construction accident cases, where a worker has comp benefits running and a Labor Law claim at the same time.
New York No-Fault puts at least $50,000 of medical coverage on the vehicle, and providers bill it directly. That money never touches your settlement. Where it goes wrong is the 30-day application deadline, or a carrier that cuts you off and sends you to an examination under oath. If that's happening to you, deal with it now — unpaid bills are exactly how medical costs end up coming out of your recovery instead of the insurer's pocket. Start with how No-Fault actually works.
Medical malpractice math is different
If your case is against a doctor or a hospital, throw out the one-third number. New York caps malpractice fees on a sliding scale that drops as the recovery grows: 30% of the first $250,000, 25% of the next $250,000, 20% of the next $500,000, 15% of the next $250,000, and 10% of everything above $1.25 million.
On a $1,000,000 malpractice recovery that's $237,500 rather than $333,333. The tradeoff is that malpractice cases carry enormous expert costs, which is why the expense line on those closing statements looks nothing like the one above. If that's your situation, start with how New York malpractice claims work.
How I make your number bigger
There are only two levers. Raise the top line, or shrink the subtractions. Both count, and the second one is the one that gets ignored.
- Find every policy. The driver, the vehicle's owner, an employer, sometimes the City. A serious injury with one small policy behind it is a different case than the same injury with commercial coverage behind it.
- Document the whole loss. Not just the ER visit — the future surgery, the job you can't go back to, the stairs you can't climb. That's what drives pain and suffering value.
- Audit every lien before paying a cent. Line by line, striking anything unrelated to the accident.
- Make the statutory reductions happen. Medicare's procurement-cost reduction and comp's share of litigation expenses aren't automatic. Somebody has to demand them.
- Verify whether an ERISA plan is truly self-funded. Plenty of plans assert rights they don't have. The plan documents settle it.
- Get every lien resolved in writing before the check is disbursed, so nothing resurfaces a year later.
What shrinks a check
- Taking the first offer. Early offers are priced on incomplete medical records, on purpose.
- Stopping treatment. A gap in treatment is the single most effective argument an adjuster has against you.
- Ignoring lien letters. Medicare in particular will keep accruing and eventually collect. Silence doesn't make it go away.
- Missing the 30-day No-Fault filing. This is how medical bills migrate from the insurer's ledger to yours.
- Blowing the 90-day Notice of Claim when a City or MTA vehicle is involved. A recovery you can't make nets you nothing at all — see suing the MTA and preparing for a 50-h hearing.
- Signing a closing statement you don't understand. You're entitled to have every line explained before you sign. Make somebody explain it.
Let's put real numbers on your case
Bring me what you have — the police report, the bills, the letter from the insurance company. I'll tell you what your case looks like and what's likely to come out of it. No charge, no pressure, and if I'm not the right fit I'll say so.
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Questions I get asked
How much of my settlement do I actually keep in New York?
There's no fixed percentage, but most clients keep somewhere between half and two thirds of the gross number. Three things come out: the contingency fee, the case expenses that were advanced, and any lien with a statutory right to repayment — mainly Medicare, Medicaid, a self-funded employer plan, or workers' comp. Regular private health insurance generally can't touch it. The size of the liens, and how hard someone fights them, is what moves your final number.
Is the attorney fee taken from the gross settlement or after expenses?
Normally after. The court rules on contingency fees compute the percentage on the net sum recovered, meaning case expenses come off first. On a $100,000 settlement with $2,400 in costs, a one-third fee figured after costs is $32,533 instead of $33,333. Your retainer agreement has to say which order applies — read that paragraph and ask about it before you sign.
Can my health insurance take money out of my personal injury settlement?
In most New York cases, no. General Obligations Law § 5-335 conclusively presumes that your settlement doesn't include compensation for medical costs your insurer already paid, and says that insurer has no lien or right of reimbursement against it. The exceptions are payers with a statutory right of repayment: Medicare, Medicaid, self-funded ERISA employer plans, and workers' compensation. If a private plan sends you a demand letter anyway, don't pay it before someone checks whether they have any right to ask.
Does Medicare have to be paid back out of my settlement?
Yes, but not at full freight. Medicare's payments are conditional and repayable, and federal regulation requires it to reduce what it collects to account for the cost of getting the recovery — your attorney fee and expenses. The first demand also routinely includes treatment unrelated to your accident, which gets disputed line by line. There are formal appeal rights if the number still isn't right.
Do I have to pay my medical bills out of my car accident settlement?
Usually not. No-Fault insurance on the vehicle covers accident-related medical bills up to at least $50,000, and providers bill that carrier directly — it never comes out of your settlement. Your settlement compensates you for what No-Fault doesn't cover, like pain and suffering. Bills only start landing on you when the 30-day No-Fault application gets missed or the carrier cuts benefits off, which is worth fixing immediately.
How long after I sign before I get my check?
Usually one to three months. The insurer needs signed releases and has a statutory window to fund after receiving them, the check has to clear the attorney trust account, and every lien must be finalized in writing before anything can be released. Lien resolution is almost always the slow part, especially with Medicare or Medicaid. Cases involving a child or an estate need court approval and take longer.
Do I pay taxes on my settlement?
Money paid for physical injury or physical sickness is generally not taxable income. Interest on a judgment, punitive damages, and claims for emotional distress without a physical injury are treated differently. I'm not a tax attorney, and neither is the guy at the barbershop — if your settlement is large or has unusual components, spend an hour with an accountant before you spend the money.
Can I negotiate my own liens without a lawyer?
You can try, and some people do. What you'd be doing is arguing statutory reduction formulas with a federal contractor or a city agency, disputing which treatment codes relate to your accident, and knowing when a lien is subordinate to something else. It's technical, unforgiving work with real money on it. The reductions that come out of it are usually worth considerably more than they cost.
Attorney Advertising. This article is general information about New York law, not legal advice, and reading it does not create an attorney-client relationship. The settlement figures shown are illustrations, not predictions — every case turns on its own facts, and fees, expenses, and lien amounts vary. Prior results do not guarantee a similar outcome. Nothing here is tax advice. If you were injured, speak with a licensed attorney about your situation as soon as possible.
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