Short Answer

In North Carolina, your settlement statement must show the total settlement, your attorney’s fee and case expenses, each lien or payoff, and your net amount. Liens get deducted because state law gives certain medical providers and benefit programs a legal claim against the settlement, and ethics rules require lawyers to hold and pay valid claims before releasing the client’s funds.

Understanding the Problem

You want to know what a North Carolina personal injury settlement statement includes, and why money is taken out for liens, before you approve it. Here, the client has settled a claim and is being asked to e-sign a settlement statement by a stated deadline so the firm can mail the check. The core question is: what must the statement show, and why are lien deductions required?

Apply the Law

Under North Carolina law, a settlement statement is a written accounting at the end of a personal injury case. It must identify the gross settlement, the agreed attorney’s contingent fee and reimbursed case costs, all third-party liens/claims to be paid from the proceeds, and the client’s net. “Liens” include statutory medical provider liens and legally enforceable reimbursement claims (for example, certain insurance, Medicare, or Medicaid claims). Lawyers must hold settlement funds in a trust account and cannot release money that is subject to a valid lien or claim until it is resolved or paid. Medical provider liens are also subject to statutory limits on how much of the settlement must be used to satisfy them.

Key Requirements

• Clear accounting: The statement lists the total settlement, attorney’s fee per the written fee agreement, case expenses, each lien/claim with the proposed payoff, and the client’s net.
• Valid liens only: A provider must properly assert and perfect a lien and provide itemized charges on request before it can demand payment from the settlement.
• Trust account handling: The lawyer must hold settlement funds in a trust account and pay valid, known liens before disbursing the client’s share.
• Statutory cap: North Carolina limits how much of the settlement (after attorney’s fees) must go to health care provider liens; if liens exceed that cap, providers share pro rata.
• Client authorization: The lawyer provides the written statement and obtains the client’s approval before disbursement; any disputed amount stays in trust until resolved.
• Forum and timing: If a lien dispute cannot be resolved, a court in North Carolina (typically Superior Court) can decide allocation; providers must give notice before funds are disbursed.

What the Statutes Say

• North Carolina Gen. Stat. § 44-49 (Medical provider liens) - Allows certain providers to assert liens on personal injury recoveries if they provide notice and itemized charges.
• North Carolina Gen. Stat. § 44-50 (Enforcement and distribution) - Authorizes attorneys to disburse and caps the portion of settlement subject to provider liens, with pro rata sharing if needed.
• NC Rule of Professional Conduct 1.5(c) (Contingent fees) - Requires a written statement at the conclusion showing the outcome and the method of determining the client’s remittance.

Analysis

Apply the Rule to the Facts: You have settled your North Carolina personal injury claim, and your lawyer sent a settlement statement for e-signature. The statement should itemize the gross settlement, fee, costs, and each lien with its payoff, leaving a clear net to you. Deductions for medical liens are required because state law grants valid lienholders a claim on the proceeds and limits how much must be paid to them. Once you approve the statement, your lawyer will pay valid liens from the trust account and mail your net check.

Process & Timing

1. Who files: No court filing is needed to disburse. Who approves: You. Where: Lawyer’s trust (IOLTA) account and secure e-signature system. What: Settlement statement and authorization to disburse funds. When: Sign by the stated deadline so funds can be released.
2. Your lawyer obtains final written payoff amounts, pays the attorney’s fee and case expenses, then issues checks to perfected lienholders. Timeframes vary with lien administrators; expect several days to a few weeks depending on the lien type.
3. Your lawyer mails your net proceeds and provides the final, itemized accounting reflecting all payments.

Exceptions & Pitfalls

• Unperfected or noncompliant liens: If a provider fails to give proper notice or won’t provide itemized records on request, its lien may be unenforceable against the settlement.
• Statutory cap and pro rata sharing: When provider liens exceed the statutory cap, they are reduced and shared proportionally after attorney’s fees are accounted for.
• Benefit plan and government claims: Some health plans, Medicare, or Medicaid may have reimbursement rights that must be resolved before disbursement; amounts can change until you receive a final demand.
• Disputed charges: Unrelated or unreasonable medical charges can be challenged; the disputed portion should remain in trust until resolved or adjudicated.
• Premature disbursement: Releasing funds before resolving known liens risks duplicate payment demands; lawyers must hold those funds until claims are settled.

Talk to a Personal Injury Attorney

If you’re reviewing a settlement statement and want to understand lien deductions and your net recovery, 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.