Short Answer

In North Carolina personal injury cases, a contingency fee usually means your lawyer’s fee is a percentage of the recovery, and that percentage can change depending on whether the case settles before a lawsuit is filed or after litigation begins. The exact percentages are not set by one statewide statute for regular injury cases, so you must look at the written fee agreement you are asked to sign. Your agreement should also explain how case costs (like records fees or filing fees) are handled and whether they come out before or after the percentage is calculated.

Understanding the Problem

In North Carolina, if you were recently injured and you are being asked to sign a contingency fee agreement before you have even provided documents, it is normal to wonder how the lawyer’s percentage changes if the claim settles early versus if a lawsuit is filed. The key decision point is whether you can sign the agreement now while still understanding what you will owe (if anything) if the case resolves by settlement before suit or only after filing in court.

Apply the Law

North Carolina allows contingency fee arrangements in injury cases, but the fee must be explained in a written agreement so you can tell (1) what percentage applies at different stages, (2) what counts as a “recovery,” and (3) how litigation expenses and other case costs affect what you receive. In most injury claims, the main “forum” starts outside court (a claim made to an insurance carrier), and if it does not resolve, the case may move into the North Carolina trial courts after a complaint is filed and served.

Key Requirements

• Written percentage terms: The agreement should clearly state the percentage the lawyer earns if the case settles before a lawsuit is filed and the percentage if a lawsuit is filed (and sometimes a different percentage if the case goes to trial or appeal).
• Clear definition of the “recovery”: The agreement should explain what the percentage is applied to (for example, the total settlement amount) and whether the percentage changes based on the stage of the case.
• Costs and expenses explained: The agreement should spell out what “costs” are (common examples include medical records charges, filing fees, service of process, deposition costs, and expert witness fees) and whether those costs are deducted before or after the attorney’s percentage is calculated.
• No upfront fee in many contingency cases (but read closely): Many contingency arrangements do not require you to pay attorney’s fees up front, but you still need to confirm how costs are handled while the case is pending and at the end of the case.
• Settlement authority and client control: Even with a contingency fee, you generally control whether to accept a settlement; the agreement often describes how settlement decisions are made and documented.
• End-of-case accounting: You should expect a closing statement showing the settlement amount, the attorney’s fee, the costs deducted, and the net amount to you.

What the Statutes Say

• N.C. Gen. Stat. § 6-21.1 (Counsel fees as costs in certain personal injury/property damage cases) - In limited situations after a lawsuit, a judge may award attorney’s fees as part of court costs if specific requirements are met.
• N.C. Gen. Stat. § 114-9.5 (Contingency fees for certain State agency contracts) - Sets percentage limits for contingency fee contracts involving State agencies (not the typical rule for private personal injury cases, but it shows North Carolina regulates contingency fees in some contexts).

Analysis

Apply the Rule to the Facts: Because you have not yet provided documents or received a clear case evaluation, the most important thing right now is that the contingency fee agreement itself must tell you how the percentage changes if the claim settles before suit versus after a lawsuit is filed. You should also focus on the cost language, because costs can affect your net recovery even when you do not pay attorney’s fees up front. Finally, if the agreement offers a “flat-fee option,” you should treat that as a different pricing structure and make sure you understand what work is included and what is not.

Process & Timing

1. Who reviews/signs: You (the injured person) and the attorney. Where: Usually outside court, before any filing. What: A written contingency fee agreement that states the percentage(s) and how costs are handled. When: Before the lawyer starts work or early in the representation.
2. Pre-suit phase: The lawyer investigates, gathers records and bills, evaluates liability and damages, and makes a claim to the insurance carrier. Many agreements use a lower percentage here because the case has not entered litigation.
3. If a lawsuit is filed: The lawyer files a complaint in the appropriate North Carolina trial court, serves the defendant, and conducts litigation (written discovery, depositions, motions, mediation, and possibly trial). Many agreements use a higher percentage after filing because litigation increases time, risk, and out-of-pocket costs.

Exceptions & Pitfalls

• “Before or after costs” confusion: Two agreements can both say “33%,” but one may calculate the fee on the gross settlement and another may calculate it after deducting costs. That difference can materially change your net.
• Costs are not the same as attorney’s fees: Even when the attorney’s fee is contingent, the agreement may require you to repay case costs from any recovery, and it should explain what happens to costs if there is no recovery.
• Medical liens and reimbursement claims: The settlement check may have to address medical provider balances or reimbursement claims (for example, health coverage payments). These are not the attorney’s percentage fee, but they can affect what you take home.
• “Lawsuit filed” trigger language: Some agreements increase the percentage when a complaint is filed; others increase it later (for example, after an answer is filed, after mediation, or if trial begins). Make sure you know the exact trigger.
• Flat-fee option misunderstandings: A flat fee may cover only a limited scope (for example, a demand package or pre-suit negotiation). If litigation becomes necessary, the agreement may switch to a different fee structure or require a new contract.

Conclusion

In North Carolina, whether your attorney’s percentage fee is lower for a pre-suit settlement and higher after a lawsuit is filed depends on the written contingency fee agreement you are asked to sign. The agreement should also clearly explain how case costs are handled and whether they are deducted before or after the percentage is calculated. Your next step is to request a plain-English breakdown of the exact percentage triggers and cost deductions in writing before you sign, especially if a statute of limitations deadline may be approaching.

Talk to a Personal Injury Attorney

If you’re dealing with a potential injury claim and you were sent a contingency fee agreement but you’re not sure how the percentage changes if the case settles versus if a lawsuit is filed, a personal injury attorney can walk you through the agreement terms, cost language, and timing issues so you can make an informed decision. Reach out today.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.