The Amount of the Settlement is the Amount of the Settlement

Freud famously said: "Sometimes a cigar is just a cigar."

When personal injury cases settle--at least in Washington--it's almost always for a gross amount.

That seems obvious to me because that's how it has always worked.

I think it works that way because if you go to trial, you get what the jury awards. You don't get to recover the attorney fees you had to pay. You don't get to recover all the costs that it took to get to a verdict.

(Disclaimer: You do get statutory fees of $200 and a few statutory costs (but they rarely amount to more than a couple of thousand dollars). You definitely don't get your actual fees or your actual costs.)

I bring this up because clients frequently ask whether the defendant is also going to pay for their attorney fees. The answer is "no." For better or worse, that isn't the way it works. Under the "American Rule" each side has to pay its own attorney fees.

Sometimes the same question is asked about medical expenses or subrogation/reimbursement amounts.

I was talking to a BC attorney the other day. We just settled a case that he referred. He asked if the defendant also agreed to take care of reimbursing the health insurance plan what it paid for treatment expenses.

I explained that was the plaintiff's obligation. She got to recover medical expenses from the defendant (even though she did not pay for them). The defendant was not going to pay twice for the same treatment by paying back the health insurance plan. If we went to trial and got a verdict of $2M, that's all the defendant would have to pay. It would not have to pay anything on top of the $2M.

So when we negotiate, it's for the whole enchilada. If we ask for $1M in exchange for a release of all claims and the defendant says "yes," we have a deal at $1M.

The defendant is going to pay $1M. That payment will be split up between costs, fees, subrogation claims, and the client's share.

The defendant is never going to pay more than $1M and we're not going back to the well to ask for more.