Short Answer

In North Carolina, deductions from a lump-sum personal injury settlement typically occur in this order: your attorney’s agreed fee and case costs come out first, then valid liens (such as medical provider liens or workers’ compensation subrogation) are paid from the remaining funds as the law requires, and the balance goes to you. Medical provider liens are capped so they cannot take more than a set portion of what remains after attorney’s fees. Government program reimbursements (like Medicare/Medicaid) must also be resolved before disbursement.

Understanding the Problem

In North Carolina personal injury cases, clients often ask, “How do attorney fees and liens come out of my settlement?” You want to know the order of deductions and what limits apply so you can estimate your net recovery. Here, you were hit by an uninsured driver and are pursuing an uninsured motorist (UM) settlement, and you are concerned about how fees, medical liens, and other paybacks will be handled before you receive your check.

Apply the Law

North Carolina law sets a clear order of payment from personal injury settlement proceeds. First, the attorney’s contingency fee and case costs are paid. Next, valid statutory liens and subrogation rights are satisfied from the remaining funds—this includes health care provider liens and, when applicable, a workers’ compensation lien. Health care provider liens are limited so they cannot consume more than a defined portion of the recovery after attorney’s fees, and multiple providers share pro rata if funds are short. Any remaining undisputed funds are paid to you.

Key Requirements

• Attorney’s fee and costs first: The agreed contingency fee and reimbursable case costs are deducted from the gross settlement before any medical liens.
• Valid health care provider liens only: Only providers that comply with lien rules may claim payment, and together they are capped so they cannot take more than a set share of the post-fee funds; if there are several, they are paid pro rata.
• Workers’ compensation subrogation: If the injury arose out of and in the course of employment, the workers’ compensation carrier may assert a lien; a court can reduce or extinguish it on motion in the appropriate superior court.
• Government and contractual reimbursements: Medicare/Medicaid and some health plans require reimbursement and often must issue a final demand before disbursement.
• Client receives the balance: After fees, costs, and valid liens/reimbursements are resolved, the remaining funds are paid to you.

What the Statutes Say

• N.C. Gen. Stat. § 44-49 (Health care provider liens) - Creates liens for medical providers for injury-related services.
• N.C. Gen. Stat. § 44-50 (Payment and cap) - Pays attorney fees first; caps and prorates provider liens from remaining funds.
• N.C. Gen. Stat. § 97-10.2 (Workers’ compensation subrogation) - Grants the comp carrier a lien on third-party recoveries and allows court reduction.

Analysis

Apply the Rule to the Facts: In your UM settlement, your attorney’s contingency fee and case costs come off the top. Next, any valid North Carolina medical provider liens are paid from the remaining funds, subject to the statutory cap and prorating. Because you were driving a company vehicle, a workers’ compensation lien may apply if the crash was within the course of employment; if asserted, your attorney can seek a court reduction before disbursement. Any required government program reimbursements are resolved, and the balance is paid to you.

Process & Timing

1. Who files: Your attorney. Where: Attorney trust account and, if needed, the county Superior Court in North Carolina. What: Finalize the settlement, obtain itemized medical bills, lien notices, and any Medicare/Medicaid/health plan final demands; prepare a written closing statement. When: Before funds are disbursed, after all lien amounts are confirmed and reductions negotiated.
2. If a workers’ compensation lien is asserted and reduction is appropriate, file a motion under the workers’ compensation subrogation statute in the proper Superior Court; hearings typically occur within weeks to a few months, depending on the county.
3. After court orders (if any) and final demands are in hand, disburse: pay attorney’s fee and costs, pay valid liens/reimbursements per statute or order, then issue the client’s net check with an itemized closing statement.

Exceptions & Pitfalls

• Providers that do not follow lien requirements may lack an enforceable lien; confirm validity before paying.
• Do not overpay one provider—medical provider liens share the capped pot pro rata after attorney’s fees.
• Always obtain Medicare/Medicaid/health plan final demands; paying without them can delay your disbursement or trigger later recovery actions.
• If a workers’ compensation lien applies, consider seeking court reduction; skipping this step can materially affect your net recovery.
• UM claims generally do not raise premiums if you were not at fault; premium changes depend on fault assignments under North Carolina rating rules.

Talk to a Personal Injury Attorney

If you’re resolving a North Carolina UM settlement and need to understand fees, lien caps, and payoff order, 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.