How Much Do Lawyers Take From a Car Accident Settlement in Colorado?

If you are asking how much do lawyers take from car accident settlement money in Colorado, the answer is the percentage written in your signed fee agreement, and no more. Most Colorado car accident lawyers work on a contingency fee, meaning they are paid a share of the money they recover and nothing if there is no recovery. Colorado's Rules of Professional Conduct require that agreement to be in writing and to spell out the percentage and how case costs are handled. That makes the agreement the real answer to the question, so it is worth reading closely before you sign.

This question usually comes from someone hurt in an accident, behind on bills and worried a lawyer will eat most of the money. That is a fair question. Below we explain how fees work under Colorado rules, what else comes out of a settlement, and how to do the math yourself.

How much do lawyers take from a car accident settlement in Colorado?

There is no single number set by law for car accident claims. Each lawyer sets their own fee schedule, and the client agrees to it in writing, so what a lawyer takes will vary depending on the agreement. What Colorado does set is the rules around that agreement. Rule 1.5 of the Colorado Rules of Professional Conduct says a fee has to be reasonable. Rule 1.5(c) requires the terms of a contingency fee agreement to be put in writing, and the agreement to be signed by both the client and the lawyer.

So the honest answer to "how much a lawyer takes" is: read the percentage in your agreement, then check whether that percentage changes at different stages of the case.

How contingency fees work

On a contingency fee basis, the lawyer takes on the risk. You pay no hourly bills and no retainer. If the personal injury claim recovers money, the lawyer takes the agreed percentage. If it recovers nothing, the lawyer gets no fee. Contingency fees are the reason most people hurt in a car accident can afford a personal injury lawyer at all. Very few people could pay hourly rates for months while they are also missing work and losing wages.

Contingency fees also give the lawyer a reason to care about the result. The lawyer only does well when the client does well, and the fee only grows when the settlement grows.

Why the percentage can change

Some agreements use one percentage for the whole case. Others use tiers, with a lower percentage if the case settles before a lawsuit and a higher one after filing suit or once trial preparation begins. The reasoning is that a personal injury case in litigation takes far more work: depositions, expert opinions, motions and court deadlines. Many cases settle without a lawsuit, but some do not. Neither fee structure is wrong. What matters is that you know which one you are agreeing to.

Attorney fees versus case costs

The fee is what the lawyer is paid for their work. Costs are the money spent to gather evidence and prove the case. In a car accident case, costs can include:

• Fees to get medical records and bills from every provider
• Police reports and crash reconstruction
• Court filing fees and fees for serving papers
• Deposition transcripts and court reporters
• Fees for experts, such as doctors who explain future treatment or a permanent injury

Many firms cover these upfront costs while the case is open and are paid back from the settlement. A smaller claim that settles in a few months may have very few costs. A disputed claim involving a serious injury, such as a traumatic brain injury, can have far more. Your agreement should say whether costs come out before or after the fee is calculated, because that changes your number.

Where the settlement money goes

When a car accident settlement is reached, you sign a settlement agreement and release, and the insurance company sends the check to your lawyer. In Colorado, the lawyer must hold that money in a trust account, kept separate from the firm's own money, until everyone with a right to it is paid. The settlement process usually looks like this:

1. The gross settlement is deposited into the trust account.
2. The attorney fees are calculated under the agreement.
3. Case costs are repaid.
4. Medical liens and reimbursement claims are paid or negotiated down.
5. The rest goes to you.

At the end of a contingency fee case, Rule 1.5(c) requires the lawyer to give you a written disbursement statement showing the amount received, the costs, any payments to others and how the fee was computed. You should be able to see every dollar.

Medical bills and liens can take a bigger bite than the fee

This is the part people do not expect. Your health insurance company, Medicare, Medicaid or a hospital may have a legal right to be paid back from your settlement for the medical expenses it covered. Colorado's hospital lien statute, C.R.S. 38-27-101, lets hospitals claim a lien in some injury cases, and Medicare has repayment rights under federal law. Colorado also limits when and how much some health insurers can take back, under C.R.S. 10-1-135.

Part of a car accident lawyer's job is checking whether each claim is valid and asking for reductions. That work happens after the case settles, but it can make a real difference to your share.

Example: what you might keep from a settlement

Here is the arithmetic with simple numbers. We use one-third only because it divides cleanly. It is not a statement of what any lawyer charges, and the figures are made up.

Say a claim settles for $30,000. The agreement takes one-third of the gross. Costs are $1,000, and medical liens are $8,000.

• Fee: $30,000 x one-third = $10,000
• Costs: $1,000
• Liens: $8,000
• To you: $30,000 - $10,000 - $1,000 - $8,000 = $11,000

If the agreement took costs out first, the fee would be one-third of $29,000, about $9,667, and you would keep about $333 more. Put your own agreement's terms into the same steps for any settlement amount.

What drives case value: economic damages and more

Your share depends on the size of the final settlement. What a car accident case is worth depends on several factors:

• Economic damages: medical bills, physical therapy, lost wages and lost income, future expenses and vehicle damage.
• Pain and the physical and emotional toll: what the law calls non-economic damages. Colorado caps these, and the limits were recently raised.
• Injury severity: minor injuries that heal in a few weeks are valued very differently from a permanent injury that keeps someone from returning to the same job.
• Fault: under Colorado's comparative negligence law, C.R.S. 13-21-111, your recovery is reduced by your share of fault, and it is barred if you are found 50 percent or more at fault. Insurance adjusters for the other party often try to shift blame for exactly this reason.
• Insurance coverage: what the other driver carries, and what your own uninsured or underinsured motorist coverage adds.

Punitive damages, called exemplary damages in Colorado, are rare and only apply when the injury involved fraud, malice, or willful and wanton conduct. We cover how these pieces add up in our post on how compensation is calculated for an injury case.

Does hiring a lawyer leave you with more money?

We cannot promise any result, and no lawyer honestly can. What we can do is explain the reasoning. An insurance company's first settlement offer reflects the evidence it has in front of it, and it is rarely in a hurry to find more. Injured people often settle before they know the full extent of their injuries. A personal injury lawyer gathers the evidence that tends to change an offer: complete medical records, witness statements, the police report, wage documents, and expert opinions on future treatment and medical costs. With strong evidence, the lawyer negotiates from facts rather than from the insurance company's estimate. If negotiations fail, the lawyer can file suit, and the insurance company knows that.

For a small car accident claim with minor injuries and clear fault, the fee may not be worth it, and a good lawyer will tell you that. For a serious injury, a disputed liability case or a wrongful death claim, there is a lot more to get right in a personal injury case.

Questions to ask before you sign a contingency fee agreement

• What is the percentage the lawyer takes, and does it change if a lawsuit is filed or the case goes to trial?
• Are costs taken out before or after the fee is calculated?
• Who pays the costs if the case loses?
• Will you work to reduce medical liens before I get paid?
• Will I get a written disbursement statement?
• Who will actually handle my personal injury claim day to day?

Make sure you know your deadline too. Most Colorado motor vehicle accident injury claims must be filed within three years, and waiting too long cannot be fixed later. Before you accept any offer from an insurance company, our post on whether to settle your personal injury case walks through what to weigh.

Get a free case review from a car accident attorney

Anderson Hemmat's car accident lawyers handle car accident claims on contingency. If you were hurt in a Colorado accident and want to know where you stand, it starts with a free, no obligation consultation where we answer your questions about fees and your claim. Call 303-782-9999 or send us a message and we will tell you honestly whether you have a claim and what your legal options are.

Frequently asked questions

What's the most a lawyer can take from a settlement?

Colorado sets no single percentage cap for car accident claims. Rule 1.5(a) of the Colorado Rules of Professional Conduct requires the fee to be reasonable, and Rule 1.5(c) requires it to be written into a signed contingency fee agreement, so the most a lawyer can take is the percentage you agreed to in writing. One federal exception: for claims against the United States government under the Federal Tort Claims Act, such as a crash with a federal vehicle, federal law limits fees to 20 percent for an administrative settlement and 25 percent once a lawsuit is filed.

How much of a 30k settlement will I get?

Start with $30,000, subtract the percentage fee in your agreement, then subtract case costs and any medical liens or reimbursement claims. With a one-third fee, used here only as an example, $1,000 in costs and $8,000 in liens, you would keep $11,000. Your number depends on your agreement's percentage, whether costs come out before or after the fee, and how much is owed to medical providers and insurers.

How much of a 50k settlement will I get?

Follow the same steps: the fee percentage from your agreement, then costs, then liens. Using one-third purely as an example, the fee on $50,000 would be about $16,667, leaving about $33,333 before costs and medical liens are paid. What you finally receive depends on those costs and on how far any liens can be reduced.

How much of a $100K settlement will I get?

Using one-third only as an example, the fee on $100,000 would be about $33,333, leaving about $66,667 before costs and liens. Larger settlements often come from cases with more medical treatment, so liens may be larger too, and reducing them can matter as much as the fee. Your written disbursement statement should show every deduction.