So let’s get it out of the way: everything in life costs money. A personal injury lawsuit is no different. It is expensive to bring a lawsuit, and it is extremely expensive to litigate a case through trial. Most times, an injury suit settles before trial, but even then there are costs that will have to be paid out of your negotiated settlement amount. Best to be educated about these costs up front and be prepared for them when your settlement approaches.

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Litigation Expenses

Think “hard costs” or “out of pocket” costs. These are the costs incurred in bringing the lawsuit in the first place. First, there are “filing fees” in every state and federal court in the country. In North Carolina, the cost of filing a lawsuit in federal court is $400.00. After that, there will be additional fees to have the lawsuit “served” on the adverse parties (the people and companies you sued). There will expenses for postage (FedEx overnight deliveries, certified mail deliveries, even simple stamps), and photocopies. Beyond that, your attorney will have ordered and prepaid for copies of all medical records in your case, which will include X-ray films or CT scans or MRI results. No doctor’s office I have ever encountered hands over these medical records and films for free. So the attorney will usually advance the funds to pay for these records (unless your retainer agreement requires that you pay out-of-pocket costs as you go). But once there is a settlement, these hard costs must be repaid. It is a good idea for you to know the amount of the hard costs—even month to month—as you go along, so you can make an educate decision when an offer of settlement is made.

Medical Bills and Liens

Most personal injury cases have lingering unpaid medical bills and medical liens. A typical revision surgery in an artificial hip case can cost $50,000.00 (sometimes more) when the surgeon’s fee and the hospital fee and the physical therapy costs and other expenses are calculated. Your attorney must pay these medical bills from the settlement funds before he or she can disburse the net settlement proceeds to you. Usually a hospital and other medical providers will submit a medical “lien” directly to your attorney putting him or her on notice of the unpaid bill. At the point, the attorney has an affirmative duty to pay this lien. Often the attorney can negotiate a reduced amount of the medical bills as settlement negotiations occur.

Health Insurance Subrogation

This one stings. Your medical care was likely covered in part by your health insurance. If you receive payment for injuries from the manufacturer of a defective medical device or drug, your health insurance provider will likely seek “subrogation” for the medical care it paid on your behalf. So if, say, Blue Cross paid a total of $20,000.00 for your revision surgery, and you are then paid a settlement for a defective medical device, Blue Cross will want reimbursement (subrogation) for its payments made on your behalf.

This line-item stings because you have paid health insurance premiums for years to provide medical care when you are injured, and then the moment you receive compensation for an injury caused by someone else, the health insurance company wants to be repaid for the medical care it paid on your behalf. It doesn’t sit well with me, but health insurance companies have good lobbyists working for them.

Litigation Loans

If you received a litigation loan, which I wrote about here, you must repay that to the loan provider, with the interest specified in the litigation loan contract.

Attorney’s Fees

Virtually all injury cases operate under a contingency fee arrangement. This means that the attorney will be paid a percentage of any financial recovery (either from settlement or verdict) at the conclusion of the case. It is called “contingency” because the legal fee is contingent on a successful outcome. If the case is lost, the attorney receives no legal fees. Typically the legal fee in an injury case is one-third of the gross amount of the settlement, but it can be as high as 40%, particularly if multiple law firms are involved (which is not uncommon in complex injury cases), or even higher if liability in the case is uncertain and other “problems” in the case exist. So if you have hired an attorney under a typical contingency fee contract with a one-third contingency payment, and you then settle the case for $150,000.00, the legal fee will be $50,000.00.

Quick note on legal fees. I can’t speak for other attorneys, but I am always willing to represent any individual in an injury case pursuant to an hourly fee arrangement. If at the beginning of the representation a client requests to pay legal fees under an hourly-fee arrangement, I will always agree. This would mean that the client will pay me by the hour for my legal work, and therefore at the end of the case the client will be able to keep the entire settlement amount (after hard costs and medical bills and other expenses are paid). The hourly fee is the legal fee arrangement most often used in civil litigation cases (e.g., like breach of contract cases).

I realize these costs and fees may seem overwhelming, not unlike the myriad charges for a single hotel room in Charleston. But it is critical for you to be aware of these costs in advance when negotiating your settlement so you can make an informed decision. Good luck.

Note: I represent individuals injured by defective medical devices and drugs in the Carolinas and throughout the country. If you have specific questions, call me: (919) 830-5602.

This is usually one of the first questions I get from people injured by a failed medical device. Typically a failed device like a hip or knee causes all kinds of health problems for a person. Often a revision surgery is necessary, and sometimes several surgeries. All this extra medical care is expensive. It also requires large amounts of time to rehabilitate and recover, which causes substantial time away from work. Some of my clients lose their jobs, or are forced to quit because they can no longer do the work. Meanwhile, the bills from surgeons and hospitals continue to pile up.

Medical Providers Expect Payment

First, no matter who is at fault for your failed medical device or harmful drug, the doctors and hospitals who provide you treatment will expect prompt payment of their bills. After surgeries, these bills often come fast and furiously. If you have health insurance you will need to arrange with the physician and/or the hospital ahead of time to file a claim for payment. But even if you have health insurance you will most likely be responsible for payment of a significant portion of the costs of your medical care (through co-pays, deductibles, and/or percentages of the medical bill not covered by health insurance). The surgeon or hospital will expect you to pay these amounts promptly.

So what can you do?

more Postponing Collections

Usually a medical provider will freeze or postpone collections on an unpaid bill when it is made aware of the existence of a third-party lawsuit. That is to say, if the hospital is informed that the patient has filed suit against a medical device manufacturer, it will usually agree to forego collections until the lawsuit is resolved. Your attorney needs to get involved quickly in this process and inform all providers in writing of the legal representation, the lawsuit, and the expectation that collections should stop until the litigation is resolved. Get confirmation in writing. Most likely the provider will issue a “lien” against any money you obtain in your lawsuit, which means the doctor or hospital will expect to be paid when the settlement is reached. Once a lien is issued, your attorney will be required to resolve that debt when a settlement is reached.

Payment Plan May Be Necessary

If for some reason the medical provider refuses to stop collections, you will need to work out a repayment plan. I get it: easier said than done when you are recovering from multiple hip surgeries and can’t return to work. But often a hospital will usually accept modest monthly payments so long as you make them each month. The provider wants to see that you will abide by the arrangement, even if the monthly payment is small.

Paying Medical Bills After You Settle Your Case

Typically in a product liability case you will resolve your lawsuit through a settlement, which is of course a negotiated “deal” that is struck between you and the manufacturer (and any other defendants). Very few medical device cases find their way to a jury. Once you reach settlement, the medical bills that you have not paid up to now will have to be paid. Doctors and hospitals do not forget. These medical providers have dedicated offices and staff to chase these payments to the ends of the Earth. So once you sign the Settlement Agreement, your attorney will have to arrange payment of these medical bills or medical “liens” promptly.

Some Settlements Include Payment of Medical Liens

In certain settlements, the defendant manufacturer will agree to pay outstanding medical liens for you. It goes something like this: after years of litigation, and after many months of negotiation, the plaintiffs and defendants in a large multidistrict litigation will come to an agreement to resolve hundreds or even thousands of cases. This will usually involve a settlement framework where the defendant company will pay certain amounts of money directly to each plaintiff who qualifies, and further, will pay the liens outstanding for these qualifying individuals. This is roughly how the Depuy ASR Settlement was constructed.

It is a great thing when the defendants agree to pay off medical liens separate from the amount you as the injured person receive in the settlement; unpaid medical bills can be substantial, and paying them off with your own settlement money can take a huge chunk out of the amount you ultimately get to take home. After all, you are the one who has suffered—physically, emotionally, financially. Each dollar that you do not have to pay out of the settlement proceeds for medical bills is a dollar that you can use to pay off credit card balances, to pay down a mortgage, to cover other bills, or simply to save.

If the agreement does not include the defendant paying off the medical liens, you will have to pay these bills yourself. Your attorney should assist you in negotiating with the hospitals and doctors’ offices, and usually these medical providers will agree to accept a smaller amount in payment of their liens, but not always. It is always best practice to have these discussions before you agree to a settlement.

The Takeaway

It is important to think about these medical bills, and who will ultimately pay these bills, when deciding whether to accept a proposed settlement agreement. Make sure you find an attorney who is aware of these issues and will walk you through the complex math before you make a final decision.

In a later post I will discuss litigation expenses related to bringing a product liability lawsuit.

Note: This is not legal advice. I do not refer to any specific case or client in this article. You can always call me if you have specific questions of your own: (919) 830-5602.