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Dealing with insurance company, lawyer
 

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daddy-o
Joined: 12 Apr 2004
Posts: 3307
Location: Springfield

8/23/13 9:26 AM

Dealing with insurance company, lawyer

I'd like some input on this.

My 27yo daughter was hit by a car that didn't yield while turning left. She was in a bike lane going straight. There is no contest about the driver's responsibility. It resulted in knee surgery, successful thus far.

It happened on a Friday morning this May. She decided on an attorney before Monday. She isn't forthcoming about the firm's name but I suspect it's a chaser. Whatever. The choice was made and changing firms at this point seems out of the question.

I'm trying to advise her with my limited accident experience. Sometimes the discussion can be tense.

I'm pretty sure the atty will take 50% of the settlement. That equates to me as she needs to double her medical, damages and expenses and then add suffering on top. She didn't have medical insurance.

Expense: She was commuting, so I think her transportation to work should be paid. Of course those would be public transportation, no receipts.

I digress.

Initially the atty said to finish all the expenses and then work from that figure to submit a claim to the ins co. It seems to me like it's time for that. I don't know why it hasn't happened, we are going to talk today (I'm east coast, she's west.)

She wanted to get a bike, pre-settlement, with a pre-payment from the insurance company. They threw up road blocks, no bike yet. She wanted to be compensated for a new helmet prior to settlement, roadblocked again.

Changing firms: they are going to bill hours if she does. Can she get a current accounting of hours and the rate? --I'll bet at least the rate will be astronomical.

I want to tell her to get on with the settlement, they're not going to pay interest on it!

Thanks in advance

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Sparky
Joined: 08 Dec 2003
Posts: 19068
Location: PDX

8/23/13 10:04 AM

50%, i don't think that is legal. I believe the norm is 34% of the first X amount of $$, and 25% of the remainder or similar?? Question is that after medical expenses??

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lrzipris
Joined: 04 Mar 2004
Posts: 532
Location: Doylestown, PA

8/23/13 1:03 PM

There is no rule or law governing percentages, but 50% sounds high to me (I am a lawyer, although I don't play one on TV). The medicals and other compensatory costs are what they are and typically should not be inflated to account for the lawyer's share. In any event, she must have signed a fee agreement with the firm, so she knows the percentage--50, 40%, whatever.

If your daughter changes lawyers and thinks she is getting ripped off by the former lawyer, there are fee dispute procedures, often sponsored by the local bar association, in every jurisdiction with which I am familiar.

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April
Joined: 13 Dec 2003
Posts: 6593
Location: Westchester/NYC

8/23/13 1:35 PM

It's a often a sliding scale. It starts as high as 50% for the first x amount, and "slide down" to about 25-30% for the next y amount. So on larger sums, it works out to be near 30%. But on small case, it's as high as 50%.

After all, the lawyer needs to get his work paid for when claim is small. Insurance company isn't paying for the lawyer's fee, your daughter does, out of whatever she can get from the insurance company.

A friend of mine got hit by a car (broken leg). He didn't quite get all the medical cost covered after the lawyer took their cut. However, had he not engaged a lawyer, the insurance was trying to pin some fault on him and he wouldn't have gotten quite as much without a lawyer!

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lrzipris
Joined: 04 Mar 2004
Posts: 532
Location: Doylestown, PA

8/23/13 2:37 PM

Contingency fees may be based, in part, on the complexity of the case, the assumption being that more work is required in more complex matters. Fifty percent for a simple matter is, to my mind, extreme. A client should not have to subsidize a lawyer's practice by balancing the fee against the lawyer's losses. That is, the fee is justified by the work required, not to offset other cases.

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April
Joined: 13 Dec 2003
Posts: 6593
Location: Westchester/NYC

8/23/13 4:26 PM

"Contingency fees may be based, in part, on the complexity of the case, "

Except, the several people I knew all had been presented a "fee schedule" that was for all "routine cases". So I'm not sure it take into consideration of complexity. In other words, I think it DOES build into the fee structure for some cases to offset other cases, including cases that lose and didn't get any money!

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dan emery
Joined: 11 Jan 2004
Posts: 6884
Location: Maine

8/23/13 5:37 PM

Couple things

First, the fee contract is whatever it says it is, and I'm not sure Daddy knows what it is, so there seems little point in speculating. Most states would have bar rules applicable to contingency agreements, but I don't know if any go into specific percentages. Maine's rule requires that the fee be "reasonable" and has other requirements.

The bigger issue I see is that settling a case like this before knowing the medical outcome would be unwise and potentially malpractice. I can't imagine how you could responsibly settle a case involving surgery this quickly. The insurance company would love to settle now for peanuts and be off the hook if she requires 4 more surgeries.

Roy, I'm guessing you never had a contingency practice :) Of course the successful cases subsidize the unsuccessful ones. If you put in time you don't get paid for, you have to charge more for the time you do get paid for. And if you choose only cases that are sure winners, lots of people who need representation wouldn't get it. And very few individual clients can afford to pay an hourly rate plus costs win or lose. I've worked 100% on contingency for years (I don't do personal injury though).

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KerryIrons
Joined: 12 Jan 2004
Posts: 3234
Location: Midland, MI

8/23/13 6:46 PM

Early payments

The desire to get a replacement bike and helmet quickly is understandable, but often the insurance company will try to get you to "sign something" and you have to be VERY careful that this does not form a limit to their liability.

It is indeed tough to pay for everything while waiting for a settlement but the insurance company often uses that as a lever to get people to sign off before they know the full extent of their costs.

It seems to me that with the clear fault of the motorist and what the cyclist had to go through that "pain and suffering" should be relatively significant in this case. That is where the $$ comes from to pay the legal fees and be assured of being whole on medical and property loss costs.

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Sparky
Joined: 08 Dec 2003
Posts: 19068
Location: PDX

8/23/13 7:11 PM

Just like to point out that the sooner she gets on the new bike and riding, the less the settlement will be. Which is bad and good of course.

Me, I would have already got another bike and still worked in the replacement cost of the trashed one.
The case, unless the injury is strictly soft tissue i am guessing, should take a while to settle. To my mind, and again both bad and good, quick settlement indicates probably light injury. Ultimately non permanent residual effect from the accident is worth more than money IMO.

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Matthew Currie
Joined: 11 Jan 2004
Posts: 800
Location: Vermont

8/23/13 8:23 PM

Good luck, folks. I was hit by a car in May of 2012, signaling left, driver claimed she did not think I was going to turn (blind dip in road making center lane claiming hazardous until the last moment), and tried to pass me and hit me in center (not far left side) of the highway. An eyewitness saw me signal, thought I might make it across, suggests that she was not in a mood to stop at all, and complained when she did stop that I'd broken her mirror! Brain stem trauma, permanent trochlear nerve damage (double vision forever), hearing loss, paraesthesia and road rash that still shows, broken vertebrae in neck and broken collarbone, a couple of weeks in hospital and months in a neck brace, and I have not been on a bike since except riding MTB around the yard this week, hoping to regain some steadiness. The nerve damage is severe enough that attempts to pedal out of seat on a spinning bike suggest that when I do start riding again I will probably not be able to climb hard, because above a certain pressure, it feels as if I'm pedaling on a nail.

I used to be a pretty intrepid Vermont narrow-road cyclist, and I loved to climb. At least I made it to 64, but now I'll be lucky if I end up one of those wheezing old farts you meet on the rail trail. If you do, please be kind and don't give me any crap about the flat pedals.

Mind you, I was in pretty good shape at the time, and am in pretty good shape now. People who don't know me that well don't realize how utterly effed up I am, and things could be a lot worse. At least I'm alive and can walk and talk. But there are some things that you can't put dollars and cents on, and goddamn it, I liked to climb.

Settlement? Not yet. A few communications and requests, all met. Insurance company asked for material then complained that there was too much! Lawyer will get 33 percent if there's ever anything to get, and if the driver's insurance company gets any lazier I think I may tell the lawyer to book a court date and screw the settlement. The driver was insured for $300 thousand and I'm asking for it all (medical bills were close to a hundred). I might tell the lawyer to suggest that if we wait much longer the bill should go up.

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Sparky
Joined: 08 Dec 2003
Posts: 19068
Location: PDX

8/23/13 8:35 PM

Wow Mathew!! Makes my case in point, bad and good, yours being a lot of bad, and little good. I am positive you'd rather have little claim on the $300k.

Although as you said, could be worse.

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daddy-o
Joined: 12 Apr 2004
Posts: 3307
Location: Springfield

8/24/13 5:10 AM

33 1/3%

Thanks everyone for your input. We talked yesterday after I posted.

So I guess telling her to sit tight is the best advice.

Matthew I sure hope you find relief.

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KerryIrons
Joined: 12 Jan 2004
Posts: 3234
Location: Midland, MI

8/24/13 7:07 PM

Ouch

Matthew I think that $300K would be pretty small beer for what you are going through. I think if I were in your situation I would be going for the full $300K PLUS garnishment of future income.

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greglepore
Joined: 10 Jan 2004
Posts: 1724
Location: SE Pa, USA

8/25/13 8:13 AM

Can't garnish income...

Matthew-shoot, man, I'm so sorry, no amt can compensate for that. I'd want her coverage plus if you have Underinsured on your own policy, that too.

Philly PI guys are getting 40% routinely, I think that's high, but I'm a pariah.

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