How Much of a Settlement Do You Actually Keep? Fees, Liens and Net Payout in New York

When an adjuster says the number, most people hear a deposit. It is not. A settlement in New York passes through three deductions before anything reaches you: your attorney’s fee, the costs advanced to build the case, and any medical liens attached to the recovery.

Understanding the order those come out in is the difference between a pleasant surprise and an unpleasant one.

1. The Attorney Fee

New York regulates contingency fees. Under the Appellate Division rules governing contingent fees in personal injury and wrongful death cases, a lawyer may use either:

• A flat percentage not exceeding 33⅓% of the sum recovered, if the retainer says so — this is what most New York firms use; or
• A sliding scale: 50% of the first $1,000, 40% of the next $2,000, 35% of the next $22,000, and 25% of anything above $25,000.

Medical malpractice is different and more favorable to the client. Judiciary Law § 474-a imposes a mandatory descending scale: 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% above $1,250,000.

2. Case Expenses

These are the out-of-pocket costs your lawyer advanced: medical records and films, the court filing fee, process servers, deposition transcripts, accident reconstruction or medical experts if the case was litigated. On a case that settles before suit, expenses are often modest. On a case that goes through depositions and expert reports, they climb quickly.

At a reputable firm you are not billed for these unless there is a recovery, and you receive an itemized closing statement listing every one.

3. Liens and Reimbursement Claims

This is the part almost nobody anticipates, and the part where good lawyering recovers real money for you.

Claimant	Basis
Hospital	Lien Law § 189 lets a hospital lien your claim for the reasonable value of emergency or inpatient care. Notice must be filed before you are paid, and the lien does not attach to settlements of $300 or less or to workers’ compensation awards.
Medicaid	New York must be reimbursed from the portion of your recovery attributable to medical expenses it paid.
Medicare	Under the federal Medicare Secondary Payer rules, conditional payments must be repaid out of the settlement. Resolving this can delay disbursement.
Workers’ compensation	If the crash happened at work, the comp carrier holds a lien on your third-party recovery under Workers’ Compensation Law § 29, and its written consent is generally required before you settle.
Private / ERISA health plan	Many employer plans include a reimbursement clause. Whether it is enforceable depends on the plan language.

What about no-fault? In the ordinary case where both drivers are covered persons, your no-fault insurer does not take a lien out of your bodily injury settlement. Instead, Insurance Law § 5104(a) simply bars you from recovering basic economic loss from the at-fault driver at all — those first $50,000 of bills and lost wages are the no-fault carrier’s job, not part of your lawsuit. If those benefits were cut off after an IME, the arithmetic changes.

A Worked Example: A $25,000 Settlement

Illustrative only — the figures below are made up to show the mechanics, not to predict any case.

Line	Amount
Gross settlement	$25,000
Less case expenses	− $1,500
Net before fee	$23,500
Less attorney fee (33⅓% of net)	− $7,833
Less hospital lien, after negotiation	− $2,500
Approximate net to client	$13,167

Change one variable and the answer moves a lot. No lien and the client nets closer to $15,700. A $6,000 unreduced Medicaid lien and it drops under $10,000. This is why a flat rule of thumb like “you keep about a third” is unreliable — liens, not fees, are usually the swing factor.

And on a $50,000 settlement

Same structure, bigger numbers: subtract expenses, then the fee on the net, then liens. If expenses were $3,000 and liens negotiated to $6,000, the client nets roughly $25,300. If the case was medical malpractice instead, § 474-a caps the fee at 30% of the first $250,000, so the fee line shrinks and the client keeps more.

How the Net Actually Gets Improved

The fee percentage is largely fixed by rule. The lien number is not. Most of the real work in maximizing what you keep happens here:

• Auditing the lien. Hospitals and health plans routinely include charges unrelated to the accident. Those come off.
• Challenging the rate. A hospital lien is limited to reasonable charges, not the chargemaster figure.
• Equitable reduction. Lienholders benefiting from a recovery your lawyer produced can often be asked to share the cost of producing it.
• Sequencing. Pushing no-fault to pay what it should have paid keeps those bills out of the lien pile entirely.

Of course, the net only matters once the gross is right. On how the settlement figure itself is built, see our guides to valuing pain and suffering and back and neck claims without surgery.

For more on the mechanics after the release is signed, see our guides on how settlement checks are distributed in New York, negotiating medical liens, and whether Medicaid takes your settlement money.

Frequently Asked Questions

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Disclaimer: This article is general information about New York law, not legal advice, and reading it does not create an attorney-client relationship. The dollar figures above are illustrative examples chosen to show how the arithmetic works; they are not averages, predictions, or a representation about any actual or potential case. Fees, expenses, and liens differ in every matter. Prior results do not guarantee or predict a similar outcome. This is not tax advice. Attorney advertising.