Settlement Net Calculator — After Attorney Fees, Liens, and Costs (2026)

The settlement distribution stack

Money flows out of a settlement in a specific order. Understanding the order helps you spot overbilling, unreasonable liens, or fee disputes before they cost you thousands.

1. Gross settlement check. Insurer issues to attorney's IOLTA trust account.
2. Attorney contingency fee. Calculated per the fee agreement — typically 33.3% or 40% of gross.
3. Case costs. Filing fees, process servers, medical record copies, expert witness retainers, court reporters, mediation fees. These were advanced by the firm and are recovered from the settlement.
4. Medical liens. Hospital bills on lien, health insurance subrogation, Medicare/Medicaid conditional payments, workers' comp lien, ERISA plan lien.
5. Outstanding balances. Unpaid medical bills the provider held during litigation ("letters of protection").
6. Net to client. What hits your bank account.

Worked example: $100,000 soft-tissue settlement

Assume rear-end collision, herniated cervical disc, treated with physical therapy and one injection procedure. No surgery. Settled pre-suit after 9 months of negotiation.

• Gross settlement: $100,000
• Attorney fee (33.3% pre-suit): -$33,333
• Case costs (records, police report, demand package): -$1,200
• Health insurance subrogation lien (BCBS paid $18,000, negotiated to $12,000): -$12,000
• Outstanding chiropractor balance (letter of protection): -$4,500
• Net to client: $48,967

That's 49% of gross — a common outcome. If the same case had gone through litigation (40% fee), added $8,000 in expert and deposition costs, and had a Medicare lien instead of private insurance, net could have dropped to $32,000-$38,000.

Negotiating medical liens is where your attorney earns their fee

Liens are not fixed. Every major lienholder has a negotiation path:

• Hospital liens. Reducible under the "made whole" doctrine in most states. Hospitals often settle for 25-50% of billed charges, especially if insurance already paid a contract rate.
• Health insurance subrogation. Private insurers under ERISA have stronger rights, but most negotiate to 50-75% of their paid claims. Cite the Common Fund Doctrine to reduce their take by the attorney fee percentage.
• Medicare conditional payments. Reduced under the MSP procurement cost formula: Medicare's share is reduced by (Attorney Fee % + Costs %) of their paid amount. A $30,000 Medicare lien on a case with 33% fee and 3% costs drops by 36% to about $19,200.
• Medicaid liens. State Medicaid programs can only claim the medical portion of the settlement (Ahlborn allocation in most states). Aggressive allocation argument frequently drops Medicaid liens by 50-80%.
• Workers' comp lien. Negotiable but harder; comp carrier has statutory subrogation rights plus credit for future benefits. Often settled via "Section 32" waiver in NY, C&R in CA.

The contingency fee structure decoded

Most PI retainers use a tiered contingency:

• Pre-suit: 33.3% if the case resolves through demand letter negotiation, before filing a lawsuit.
• Post-filing: 40% once a complaint is filed — the fee bumps the moment your attorney files suit, not when the case actually advances.
• Post-arbitration/trial: 45% if the case proceeds to arbitration, mediation fails, or trial begins.
• Post-appeal: 50% if appellate work is required.

Case costs are on top of the fee. Read carefully: some retainers deduct costs first (benefits client), others deduct fee first (benefits attorney). "Net" vs "gross" fee calculation can swing your take-home by 3-7% on larger cases.

Costs that eat into settlements

Common case costs and typical ranges:

• Medical records retrieval: $50-$500 per provider
• Police report: $15-$50
• Filing fees: $250-$500
• Process server: $75-$200
• Deposition transcripts: $400-$1,500 per deposition
• Expert witness retainer (accident reconstructionist, medical expert): $5,000-$25,000
• Mediator fee (split 50/50): $1,500-$4,000 per side
• Life care planner (catastrophic cases): $8,000-$25,000
• Economist for lost earnings: $3,000-$10,000

For soft-tissue pre-suit cases: usually under $2,000. For litigated moderate cases: $8,000-$20,000. For catastrophic trial cases: $75,000-$300,000+.

Tax treatment matrix

• Physical injury or sickness compensatory damages: NOT taxable (IRC 104(a)(2)).
• Emotional distress from physical injury: NOT taxable.
• Emotional distress without physical injury: TAXABLE as ordinary income (e.g., defamation, pure emotional torts).
• Punitive damages: TAXABLE regardless of case type.
• Interest on settlement: TAXABLE.
• Lost wages in employment/discrimination cases: TAXABLE (subject to W-2 withholding).
• Property damage: NOT taxable if less than basis; gain above basis is taxable.
• Attorney fees in taxable cases: Client is taxed on the full gross, not the net, with fees deductible above-the-line in employment/civil rights cases post-2018.

Before you sign the release

• Ask for a written settlement statement showing gross, fee, every cost line-item, every lien, and net.
• Confirm the fee calculation method (gross vs net).
• Confirm each lien amount is final and reduced — not "estimated."
• Check for Medicare Set-Aside (MSA) requirements if you're 65+ or on SSDI.
• Get the release language — confirm scope (this claim only) and whether future claims are barred.
• Understand the disbursement timeline in writing.
• If you're a minor or incapacitated, confirm probate/guardianship approval if required.