By Jay Wasserman

Most people who hire an injury lawyer ask one question at the first meeting: what is my case worth? A better question, and one that gets asked far less often, is how much of it I will actually keep.

The two numbers are never the same. A settlement figure is a gross number. Before any of it reaches the client, it pays the attorney’s fee, reimburses the costs of the case, and satisfies everyone who paid for medical care and now claims a right to be repaid: a health insurer, an employer’s benefit plan, Medicare, Medicaid, a workers’ compensation carrier, a hospital, or a doctor who treated on the promise of payment from the recovery. In a serious case there can be five or six of those claims, each governed by a different body of law, and the difference between handling them well and handling them passively can be tens of thousands of dollars.

This article walks through where the money goes in a Florida personal injury settlement, which of those claims can be reduced and how, and what you are entitled to see before you sign the closing statement.

Start with the fee agreement

In Florida, personal injury lawyers almost always work on a contingency fee, and the terms are not left entirely to the market. Rule 4-1.5(f) of the Rules Regulating The Florida Bar requires a written contract signed by the client and the lawyer, a separately signed Statement of Client’s Rights, and a right to cancel the contract within three business days without penalty. The contract must state the percentage the lawyer will receive and how costs are handled, including whether they are deducted before or after the fee is calculated.

For personal injury and wrongful death cases, Rule 4-1.5(f)(4)(B) sets a fee schedule. A fee above it is presumed clearly excessive unless a court approves it in advance:

Before an answer is filed (or a demand for arbitrators is made): 33⅓ percent of any recovery up to $1 million, plus 30 percent of the portion between $1 million and $2 million, plus 20 percent of the portion above $2 million.
After an answer is filed, through judgment: 40 percent of any recovery up to $1 million, plus 30 percent between $1 million and $2 million, plus 20 percent above $2 million.
If every defendant admits liability in its answer and asks for a trial on damages only: 33⅓ percent up to $1 million, 20 percent between $1 million and $2 million, and 15 percent above $2 million.

The schedule is tiered, so a $1.5 million settlement after suit does not carry a flat 40 percent fee; the second half-million is calculated at 30 percent. The contract may also provide for an additional percentage if an appeal or post-judgment proceedings become necessary.

Two kinds of cases carry tighter limits set by law rather than by the Bar. In claims against the State and its agencies and subdivisions, Fla. Stat. § 768.28(8) caps attorney’s fees at 25 percent of any judgment or settlement. In medical malpractice cases, Article I, Section 26 of the Florida Constitution entitles the claimant to 70 percent of the first $250,000 recovered and 90 percent of anything above that, exclusive of reasonable and customary costs, subject to the claimant’s right to waive that limit under the procedure the Bar rules provide. Our guide to medical malpractice claims in Florida covers those cases in more detail.

Costs are not the fee

Separately from the fee, a case incurs costs: filing and service fees, medical records charges, court reporters and deposition transcripts, expert witnesses, accident reconstruction, mediation fees, and trial exhibits. In most contingency arrangements, the firm advances these costs and is reimbursed from the recovery. If there is no recovery, the contract determines whether the client owes them. At KWBR, as in most personal injury matters, the firm advances case costs, so there is no out-of-pocket cost to the client unless we obtain a recovery.

Costs vary enormously with the case. A pre-suit settlement of a car accident claim may involve little more than records charges. A medical malpractice or trucking case that goes through expert discovery can involve six figures of expert time. You are entitled to an itemized accounting, and the closing statement must provide one.

PIP is not a lien, but it shapes the damages

In a Florida car accident, the first $10,000 of medical and wage benefits usually comes from your own personal injury protection coverage. PIP generally does not have to be repaid out of your bodily injury settlement. The trade-off is in Fla. Stat. § 627.736(3): you cannot recover from the at-fault driver the damages that PIP has paid or is required to pay. Those dollars come off the claim at the start rather than being repaid at the end. Our car accident guide explains the 14-day treatment rule and the other conditions that decide whether PIP pays at all.

Health insurance: who paid, and under what law

When a health plan paid your medical bills, it will almost always claim reimbursement from the recovery. What it is actually entitled to depends first on what kind of plan it is, and that is the single most important question in lien resolution.

Fully insured plans governed by Florida law. If the coverage is an insurance policy issued in Florida (an individual policy, or a group policy an employer buys from an insurer), Florida’s collateral source statute controls. Fla. Stat. § 768.76(4) limits the insurer’s reimbursement to the collateral source benefits the claimant actually recovered from the tortfeasor, reduced by the insurer’s pro rata share of the attorney’s fees and costs incurred to recover them. The statute computes that share as the same percentage of the settlement that went to fees and costs. If 36 percent of the settlement went to fees and costs, the insurer’s claim is reduced by 36 percent. Florida courts have also recognized equitable limits on subrogation where the injured person has not been made whole, which matters in limited-coverage cases.

Self-funded ERISA plans. Many large employers do not buy insurance for their employees; they pay claims out of their own funds and hire an insurance company only to administer the plan. Those self-funded plans are governed by the federal Employee Retirement Income Security Act, and under FMC Corp. v. Holliday, 498 U.S. 52 (1990), state laws regulating insurance, including Florida’s reimbursement limits, do not apply to them. The plan’s written terms control. In US Airways, Inc. v. McCutchen, 569 U.S. 88 (2013), the Supreme Court enforced a plan’s reimbursement clause over equitable defenses like the made-whole doctrine, while holding that the common-fund doctrine fills the gap where the plan is silent about attorney’s fees. In Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, 577 U.S. 136 (2016), it held that a plan cannot recover from a participant’s general assets once the settlement funds have been spent on nontraceable items, which is why a careful lawyer holds the disputed amount in trust rather than disbursing it and hoping.

The practical lesson is that the first step is to get the plan documents, not the collection letter. The summary plan description, the governing plan document, and the funding arrangement decide whether the plan is self-funded, whether its reimbursement language actually reaches this recovery, and whether it must share in fees. Recovery vendors routinely assert full-value claims that the plan’s own language does not support, and many plans will reduce a claim when the settlement was limited by thin insurance or disputed liability, even when they are not strictly required to.

Government and military plans. Federal employee plans (FEHBA), TRICARE, and VA care each have their own federal recovery rules. They need to be identified early because they do not follow either Florida law or ERISA.

Medicare

If you are a Medicare beneficiary and Medicare paid for injury-related care, the Medicare Secondary Payer Act, 42 U.S.C. § 1395y(b)(2), makes those payments “conditional”: Medicare paid because the liable party had not yet, and it must be repaid from the settlement. The process runs through the Benefits Coordination & Recovery Center.

How it typically works:

Report the claim early. Opening a case with the BCRC produces a conditional payment letter listing what Medicare believes it paid. Those lists routinely include unrelated care, such as diabetes management, a cardiology visit, or a prescription refill, that must be disputed line by line.
Settle, then report the settlement. Medicare issues its final demand after it is notified of the settlement amount, fees, and costs.
Medicare shares in the cost of recovery. Under 42 C.F.R. § 411.37, Medicare reduces its recovery by its proportionate share of the procurement costs, meaning the attorney’s fees and costs.
Pay on time. The final demand is due within 60 days; interest accrues after that.
Ask for more when the facts warrant it. Medicare can waive recovery in whole or part for financial hardship or where recovery would be against equity and good conscience, and it can compromise a claim. Those requests take documentation and time, and they are worth making in cases where limited insurance left the beneficiary far short of full compensation.

CMS does not pursue recovery from physical-trauma liability settlements of $750 or less, a threshold it has kept in place for 2026.

Medicare Advantage plans (Part C plans run by private insurers) also claim reimbursement, and the Eleventh Circuit, which covers Florida, has held they may sue under the Medicare Secondary Payer Act’s private cause of action, which allows double damages against a primary payer that fails to reimburse. Humana Medical Plan, Inc. v. Western Heritage Insurance Co., 832 F.3d 1229 (11th Cir. 2016). That decision is a large part of why liability insurers in Florida insist on resolving Medicare Advantage claims before they will release funds.

Future medical care is a separate issue. Workers’ compensation settlements have a formal Medicare set-aside review process; liability settlements do not have an equivalent formal process, but the obligation not to shift the cost of injury-related future care onto Medicare still has to be considered in cases involving beneficiaries with significant ongoing treatment.

Medicaid

Florida’s Medicaid program has a statutory right to be repaid from a recipient’s recovery under Fla. Stat. § 409.910, the Medicaid Third-Party Liability Act, which assigns the recipient’s right to recover medical expenses to the Agency for Health Care Administration and gives it a lien on the recovery.

The statute sets a default formula in § 409.910(11)(f): after attorney’s fees (treated as 25 percent of the recovery for this purpose) and taxable costs are deducted, Medicaid receives one-half of the remaining recovery, up to the total amount Medicaid paid. In a modest settlement with a large Medicaid lien, the formula can take a large share of what is left.

The formula is not the last word. Under § 409.910(17)(b), the recipient may challenge it in a proceeding before the Division of Administrative Hearings by proving, by clear and convincing evidence, that a lesser portion of the total recovery should be allocated as reimbursement for past and future medical expenses than the formula produces. The typical evidence is the full value of all damages, often shown through expert testimony, and the ratio between that full value and the settlement. If a case worth $3 million settled for $300,000 because of limited insurance, the argument is that only about 10 percent of each element of damages, including medical expenses, was recovered. The statute requires the disputed amount to be placed in trust and has a short deadline to file the petition, so the decision to challenge has to be made at the time of settlement.

The federal limits behind that process come from three Supreme Court cases. Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006), held that a state may recover only from the portion of a settlement that represents medical expenses. Wos v. E.M.A., 568 U.S. 627 (2013), struck down a statute that set an irrebuttable one-third presumption. And Gallardo v. Marstiller, 596 U.S. 420 (2022), a Florida case, held that Medicaid may recover from the portion of a settlement representing future medical expenses as well as past ones. Many Florida Medicaid recipients are also enrolled in managed care plans, which may assert recovery claims of their own; identifying the right entity, and the right amount, is part of the work.

Workers’ compensation

If you were hurt on the job by someone other than your employer, such as another contractor, a driver, or a product manufacturer, you may have both a workers’ compensation claim and a third-party negligence claim. The compensation carrier has a lien on the third-party recovery under Fla. Stat. § 440.39(3)(a) for benefits it has paid, and it may take a credit against future benefits.

The statute contains two important limits. The carrier’s lien is reduced by its pro rata share of attorney’s fees and costs. And if the employee shows that the recovery was less than the full value of the damages because of comparative negligence or limited insurance coverage and collectability, the trial court can reduce the lien proportionately. That equitable distribution hearing is often where a workers’ compensation lien is resolved. Our guide to construction site injuries covers the interplay between compensation benefits and third-party claims.

Hospital liens, letters of protection, and unpaid bills

Hospital liens. Florida has no general statewide hospital lien statute. Some counties and public hospital districts have liens created by local ordinance or special act, and their validity has been litigated. In Shands Teaching Hospital & Clinics, Inc. v. Mercury Insurance Co. of Florida, 97 So. 3d 204 (Fla. 2012), the Florida Supreme Court struck down a hospital lien created by special act for Alachua County, while concluding that a county ordinance creating a similar lien was not barred by the same constitutional provision. Whether a particular lien was properly perfected, whether it is valid, and how much of the bill it secures are all questions to check before paying it.

Letters of protection. Injured people without health insurance, or whose insurance will not cover the care, often treat with doctors and surgery centers under a letter of protection, a promise that the provider will be paid from the recovery. Those balances are frequently negotiable at the end of the case, particularly where the recovery is limited. Since 2023, Fla. Stat. § 768.0427 requires disclosure of letters of protection in litigation and limits the medical damages evidence a jury hears, which affects both how these cases are valued and how the providers are paid. Our guide to uninsured motorist claims discusses how that statute plays out in practice.

Unpaid bills with no lien. A provider who was never paid and holds no lien or letter of protection is a creditor, not a lienholder. Whether and how to pay those balances from the settlement is a conversation to have with your lawyer, because unpaid medical debt does not disappear when the case ends.

Release terms that affect the money

The release you sign to finalize the settlement is not boilerplate, and several of its terms bear directly on the distribution:

Lien indemnity. Insurers commonly ask the claimant to promise to satisfy all liens and to indemnify the insurer and its insured against any lienholder’s claim. That promise is appropriate only if the liens are actually known and accounted for.
Payees on the check. Some insurers want to name a lienholder, including Medicare or a hospital, as a co-payee. That can stall disbursement for months, and it is usually avoidable with a proper lien-satisfaction provision.
Medicare provisions. For beneficiaries, releases often include representations about Medicare status and future medical care. They should be accurate and no broader than the facts require.
Scope. The release should name the parties being released and no one else, particularly where other defendants, umbrella carriers, or your own UM coverage remain in play. Our guide to policy limits demands explains why the scope of a release can matter as much as its amount.

Timing: from agreement to disbursement

Under Fla. Stat. § 627.4265, once an insurer and a claimant agree in writing to settle, the insurer must tender payment within 20 days, or by another date the agreement sets. If payment is late, it bears interest at 12 percent a year, though where payment is conditioned on a signed release, interest does not begin to run until the executed release is delivered.

The settlement funds go into the law firm’s trust account. Florida’s trust accounting rules in Rule 5-1.1 govern what happens next: undisputed amounts can be disbursed once the funds have cleared, and amounts subject to a genuine dispute, such as a contested lien, must be held in trust until the dispute is resolved. In many cases, the client receives most of their share promptly while a reserve sits in trust for a Medicare final demand or an ERISA negotiation that takes longer.

Settlements that need a court’s approval

Minors. Under Fla. Stat. § 744.387, a parent may settle a minor’s claim of $15,000 or less. When a lawsuit has been filed, any settlement requires the approval of the court handling the case, and when the net settlement to the minor exceeds $15,000, a legal guardianship of the property is required. Under § 744.3025, a court may appoint a guardian ad litem to evaluate a settlement when the gross settlement exceeds $15,000 and must appoint one when it equals or exceeds $50,000.

Wrongful death. Wrongful death recoveries are allocated among the estate and the statutory survivors, and settlements involving minor survivors or contested allocations typically go before the probate or circuit court. Our guide to Florida wrongful death claims explains who the survivors are and what each may recover.

Protecting what is left

A few planning questions should be answered before the money is disbursed, not after.

Taxes. Under 26 U.S.C. § 104(a)(2), damages received on account of personal physical injuries or physical sickness are generally excluded from federal income tax. Punitive damages, interest, and damages for emotional distress unconnected to a physical injury generally are taxable, and medical expenses you previously deducted may need to be included. A settlement with taxable components is worth a conversation with a tax professional.
Public benefits. A lump sum can end eligibility for needs-based programs like SSI and Medicaid. A properly drafted special needs trust under 42 U.S.C. § 1396p(d)(4)(A), or a pooled trust under § 1396p(d)(4)(C), can preserve eligibility, but it needs to be in place when the funds are paid.
Structured settlements. In larger cases, part of the recovery can be paid over time through an annuity, which preserves the tax exclusion for the future payments and protects against the funds being spent too quickly. Those payment rights can later be sold only with court approval under Florida’s structured settlement protection statute, Fla. Stat. § 626.99296, which exists because factoring companies often buy them at steep discounts.

The closing statement

At the end of a Florida contingency fee case, Rule 4-1.5(f)(5) requires the lawyer to prepare a closing statement itemizing all costs and expenses and showing the fee received by each participating lawyer or firm. The client and every participating lawyer sign it, and each receives a copy.

Read it before you sign. It should show, at a minimum:

The gross settlement amount.
The attorney’s fee, calculated as the contract and the Bar’s schedule allow.
Each cost, itemized.
Each lien and medical bill paid, with the amount originally claimed and the amount actually paid.
Any amount held back in trust, why it is being held, and what happens to it when the dispute is resolved.
The net amount to you.

If something on the statement is unclear, ask before signing. A good lawyer will be able to explain every line.

A hypothetical

Hypothetically: a Broward County teacher is rear-ended and needs shoulder surgery. Her claim settles before suit for $300,000, combining the at-fault driver’s policy and an umbrella policy found through a § 627.4137 disclosure. Her fee agreement provides for 33⅓ percent before an answer is filed, with costs deducted after the fee is calculated.

Attorney’s fee: $100,000.
Costs: $6,000 for records, a surgeon’s narrative report, and mediation.
Health insurance: her school district’s plan, a fully insured policy, paid $45,000 and claims it all. Because fees and costs are 35⅓ percent of the settlement, § 768.76(4) reduces the claim by the same percentage, to $29,100.
Surgery center balance under a letter of protection: $30,000, negotiated to $21,000 in light of the limited coverage.

She receives $143,900. Had the same plan been a self-funded ERISA plan, Florida’s statutory reduction would not have applied, and the result would have turned on the plan’s own reimbursement language and how well its claim was negotiated. Had she been a Medicare beneficiary, the conditional payment list would have had to be reviewed and disputed, and the reserve held until the final demand arrived. None of this would have been visible in the $300,000 headline figure.

Frequently asked questions

How much will my lawyer take? It depends on the contract and the stage of the case. For Florida personal injury cases, the Bar’s schedule generally caps the fee at 33⅓ percent of the first $1 million before an answer is filed and 40 percent after, with lower percentages on amounts above $1 million, unless a court approves more. Claims against government entities are capped at 25 percent by statute, and medical malpractice recoveries are subject to the constitutional limits described above.

Does my health insurance have to be paid back? Usually something does, but often less than the plan first asks for. A fully insured Florida plan’s reimbursement is reduced by its share of fees and costs under § 768.76(4). A self-funded ERISA plan is governed by its own terms, which need to be read rather than assumed.

Does Medicare get paid before I do? Medicare must be repaid from the settlement, but its claim is reduced by its share of fees and costs, can be disputed line by line, and can be waived or compromised in appropriate cases. Your share can usually be disbursed while the Medicare portion is held in trust pending the final demand.

Can the Medicaid lien be reduced? Yes. The statutory formula is the default, but a recipient can ask the Division of Administrative Hearings to allocate a smaller portion of the settlement to medical expenses, typically by proving the full value of the damages and the ratio between that value and the settlement. The deadlines are short.

How long after settlement will I get paid? The insurer generally must pay within 20 days after the settlement is agreed or the release is delivered, depending on the agreement. Undisputed funds can usually be disbursed once the payment clears the trust account. Amounts subject to unresolved liens may be held longer.

Is my settlement taxable? Compensation for physical injuries is generally excluded from federal income tax. Punitive damages and interest generally are not, and some other components may be taxable. Ask a tax professional about any settlement with those components.

What if I disagree with the closing statement? Do not sign it until your questions are answered. Disputed amounts must be held in the firm’s trust account until the dispute is resolved.

Talk to a Florida personal injury attorney

The recovery in an injury case is measured by what reaches the client, not by the number in the press release. Getting there means identifying every lienholder early, reading plan documents instead of collection letters, disputing unrelated charges, using the reductions Florida and federal law provide, and planning for taxes and benefits before the money moves.

KWBR’s personal injury, auto accident, premises liability, and wrongful death practices represent injured people and families throughout Broward, Palm Beach, and Miami-Dade Counties, from our Boca Raton, Fort Lauderdale, and Orlando offices. If you have been hurt, or you are weighing a settlement offer and want to understand what you would actually keep, contact us for a free consultation.

This article is for general informational purposes and is not legal advice. Statutes, rules, regulations, and plan terms vary with the facts, and every case turns on its own circumstances; consult a qualified Florida attorney about your situation.

Where the Settlement Money Goes: Fees, Costs, Medical Liens, and the Closing Statement in a Florida Injury Case