A settlement offer is usually stated as a gross amount. The practical decision also requires a documented estimate of fees, case expenses, medical balances, reimbursement interests, prior payments, allocations, and unresolved items that may affect the amount distributed.

The gross settlement amount and the amount a claimant may receive are different figures, and every subtraction should have an identified source, status, and calculation.

Record the complete offer

  • Offer date, amount, expiration, payer, policy or claim, claimant, recipient, and person with settlement authority
  • People, entities, claims, injuries, property, policies, coverages, dates, and proceedings included
  • Payment timing, installments, allocations, confidentiality, indemnity, dismissal, lien, tax, enforcement, and other conditions
  • Whether the proposal is a policy-limit tender, partial settlement, property payment, bodily-injury resolution, or global release
  • Open issues that the offer does not resolve

Calculate the fee from the signed agreement

North Carolina State Bar Rule 1.5 says a contingent-fee agreement must be in a writing signed by the client and state how the fee is determined, including applicable percentages, litigation and other expenses deducted from the recovery, and whether expenses are deducted before or after the fee calculation. The rule also calls for a written statement at the end showing the remittance and how it was determined.

  • Applicable percentage at the current stage and any different settlement, trial, or appeal percentage
  • Gross amount to which the percentage applies
  • Whether specified expenses are subtracted before or after the percentage calculation
  • Any fee division or separate representation relevant to the written agreement
  • Arithmetic shown line by line rather than as an unexplained fee total

Itemize case expenses

  • Records, reports, filing and service, transcripts, depositions, experts, investigators, travel, exhibits, mediation, postage, and other agreed costs
  • Date, vendor, purpose, invoice, amount paid, amount advanced, amount disputed, and person responsible
  • Duplicate, refunded, waived, estimated, or future expense kept separate
  • Expenses that remain the client’s responsibility under the agreement even if no recovery occurs

Reconcile medical expenses and balances

North Carolina Evidence Rule 414 limits evidence offered to prove past medical expenses to amounts actually paid for satisfied bills and amounts actually necessary to satisfy incurred but unpaid bills. Keep the provider charge, payment, adjustment, denial, current balance, service, payer, and supporting record as separate fields.

List liens and reimbursement interests without guessing

  • Claimant or plan name, asserted source, holder, notice date, reference number, services or payments claimed, and current amount
  • Whether the interest is confirmed, conditional, estimated, disputed, negotiated, waived, satisfied, or unresolved
  • Health plan, governmental benefit, medical-payments, workers’ compensation, provider, assignment, or other asserted interest reviewed under its own authority
  • Written final amount and payment instructions before distribution when required
  • No subtraction entered twice merely because the same service appears in a bill, benefit statement, and lien notice

Show the net range

  • Gross offer
  • Minus calculated fee under the signed agreement
  • Minus verified case expenses
  • Minus current medical balances and legally applicable repayment amounts
  • Plus or minus allocations, prior payments, credits, disputed items, or taxes when actually relevant
  • Estimated net, confirmed net, unresolved range, and date of calculation

Keep the decision with the client

North Carolina State Bar Rule 1.4 requires a lawyer to keep the client reasonably informed and explain a matter enough to permit informed decisions. The worksheet should show the offer, alternatives, uncertainties, deadlines, release terms, and net calculation without converting an estimate into a promised result.

The related North Carolina car-accident settlement-readiness guide explains the responsibility, medical, loss, coverage, lien, deadline, and release record that should be developed before an offer is evaluated.

Rosensteel Fleishman Car Accident & Injury Lawyers provides information about evaluating net recovery in a Charlotte car-accident settlement. The worksheet should use the actual agreement, balances, repayment claims, and settlement terms.

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