Short Answer

In North Carolina, most personal injury lawyers use written contingency fee agreements. If there is no settlement or judgment, you typically do not owe an attorney’s fee. You may still owe case expenses (like records, filing, or expert costs) depending on what your fee agreement says. Medicaid and medical provider liens are paid only from any recovery, so if there is no recovery, nothing is disbursed to them at that time.

Understanding the Problem

North Carolina personal injury clients often ask: if the insurer denies or offers no settlement, do I still have to pay my lawyer? You are the injured party considering a contingency fee arrangement and want to know your financial obligations if the claim does not resolve. Here, one important fact is that Medicaid paid some of your treatment, which raises lien questions only if money is recovered.

Apply the Law

North Carolina permits contingency fees in personal injury cases, but the written fee contract controls your obligations. These agreements must explain how the fee is calculated and how expenses are handled. If there is no settlement or judgment, a standard contingency agreement charges no fee. Litigation expenses (records, filing, experts, deposition costs) may be owed by you regardless of outcome or only if there is a recovery, depending on the agreement. Medicaid and medical provider liens attach to settlement or judgment proceeds; they are paid from the recovery, not out-of-pocket absent a recovery. If the insurer refuses to pay, you can file a lawsuit in the trial court where the crash happened or where the defendant resides. North Carolina generally allows three years from the crash to file a negligence lawsuit, but deadlines can vary with the claim type.

Key Requirements

• Written fee agreement: Your contingency fee must be in writing and explain the fee percentage and how expenses are handled.
• No recovery, no fee (usually): Under a standard contingency, if there is no settlement or judgment, the attorney’s fee is $0.
• Expenses are separate: You may owe costs (records, filing, experts) even if you recover nothing, unless your contract makes repayment contingent on winning.
• Liens paid from proceeds: Medicaid and provider liens are paid only from settlement or judgment funds, if any.
• Forum and timing: If no offer, you may sue in District or Superior Court (amount determines venue); North Carolina generally provides three years to file for negligence.

What the Statutes Say

• N.C. Gen. Stat. § 108A-57 (Medicaid reimbursement) - Allows Medicaid to be repaid from third-party recoveries.
• N.C. Gen. Stat. § 44-49 (Medical provider liens) - Creates liens for reasonable medical charges on injury recoveries.
• NC Rule of Professional Conduct 1.5(c) (Contingent fees) - Requires a written agreement explaining the fee method and expenses.
• NC Rule of Professional Conduct 1.8(e) (Advancing costs) - Permits lawyers to advance costs and make repayment contingent on recovery.

Analysis

Apply the Rule to the Facts: Your lawyer’s contingency agreement controls fees and costs. If the insurer stands firm and you recover nothing, a standard North Carolina contingency agreement charges no attorney’s fee. Whether you must reimburse expenses for records, photos, and filing depends on the contract terms—some agreements require repayment only if there is a recovery. Because Medicaid paid some bills, no lien payment is made unless and until money is recovered.

Process & Timing

1. Who files: Injured person (plaintiff). Where: Civil trial court in North Carolina where the defendant resides or where the crash occurred (District Court for smaller claims; Superior Court for larger claims). What: Civil Summons (AOC-CV-100) and a Complaint. When: Generally file within three years of the crash; earlier or different deadlines can apply for special defendants or claims.
2. After filing, serve the defendant; the insurer will assign defense counsel. Expect written discovery, depositions, and court-ordered mediation. Timelines vary by county and case complexity.
3. Cases resolve by settlement or trial. If there is a recovery, fees and valid liens are paid from the proceeds per your fee agreement and applicable law; if not, the case may end with no attorney’s fee and only those expenses your contract requires.

Exceptions & Pitfalls

• Your fee contract controls costs: some require you to repay expenses even if you do not recover; others waive them if there is no recovery. Clarify this in writing.
• Do not sign a release unless you have an actual settlement; mutual release or indemnity clauses can create unexpected obligations.
• Medicaid and provider liens do not get paid without a recovery, but they can attach to any later settlement or judgment; keep records organized for future resolution.
• Waiting too long can forfeit your claim; if the insurer won’t pay, calendar the filing deadline and consider suit well before it expires.

Talk to a Personal Injury Attorney

If you’re facing a denied claim and want to understand your fee obligations and next steps, our firm has experienced attorneys who can help you understand your options and timelines. Reach out today at (919) 341-7055.

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.