Skip to content

How are personal injury settlements paid out in Newfoundland and Labrador?


Senior woman in a blue sweater attentively reviewing a document related to her personal injury settlement while speaking on the phone, with a laptop open in front of her suggesting she is handling matters from home.

This is one of the questions that we are asked most frequently at Roebothan McKay Marshall. There seems to be a lot of fear and uncertainty in the minds of personal injury victims around this issue. “Will I have to pay huge fees that I can’t afford to pursue this case?” “ Am I going to have to take a loan to afford a lawyer’s fees?” “Will I have to negotiate the terms of my settlement?” The simple answer to these questions is “No!”

Pursuing a personal injury claim through the legal system can be a complex and time-consuming endeavor. That’s why it’s best to hire a lawyer to do it for you. But one part of that process which is not particularly complex for a claimant is how you finance it, and how you get paid out at the end of the process.

How do you pay a personal injury lawyer?

You probably don’t. The insurance company for the respondent to your lawsuit does. Of course, you can pay our fees as we proceed if you want to. But most people don’t have that kind of money sitting around. And cases can take up to several years to settle. So, law firms have developed the contingency fee system. This means that we take an agreed-upon-in-advance percentage of your final settlement, and the damages recovered, when and if we are successful. If you don’t receive a favorable judgment or settlement, we don’t get paid. That takes all the pressure off of you, and puts it onto us to deliver for you. We think that’s the way it should be. You need to focus on recovering from your injuries, not stressing about legal fees.

When your case is settled, we will receive a check from the insurance company. We deduct all the expenses we have occurred during your case, such as paid testimony from expert witnesses, medical-legal letters from doctors, and the agreed-upon percentage of the settlement amount. The rest is handed over to you. It’s important to note at this point that settlements and court awards for pain and suffering are not taxable. An award for pain and suffering isn’t seen as income by Revenue Canada. It’s compensation for your loss. That means you keep the entire amount that you receive.

The obvious next question is, what then is the percentage that we take? That depends. It depends on the size and complexity of the case, and the amount of risk that the law firm is exposing itself to. If it’s a difficult case, with a lower likelihood of success, the contingency fee will be higher. For most cases, the usual contingency fee is around one-third of the amount recovered. But that is negotiable. What’s more, in Newfoundland if you feel unsatisfied with the final bill you can have the bill reviewed. This is done by a person called a Taxing Master. They can determine if the bill is fair and reasonable and, if they think it isn’t, have it reduced.

When it comes time to actually receive your settlement, there are two different ways it can be paid. One is as a lump sum settlement. Your law firm will receive a cheque for the full amount of the settlement from the insurer, and then give you your share. Or it can be set up as a structured settlement. This means you will receive the money over time in predetermined amounts. Structured settlements are negotiated arrangements where the claimant ( you ) receives part or all of your settlement as payments over time, not as a lump sum.

Structured settlements versus lump sum

Structured settlements may be requested by the plaintiff or offered by the respondent for a variety of reasons. They usually replace lost wages, income, and future earnings when a plaintiff has suffered a catastrophic injury and is permanently disabled. They are meant to provide long-term financial security and the certainty of income to an injured person over a long period of time.  Ultimately, both parties must agree to them. They are also known as periodical payments or, if they are the result of a court judgement as opposed to a settlement, they are called structured judgements.

We have helped countless clients in Newfoundland and Labrador achieve personal injury settlements in either form. If you have suffered a personal injury, and need help getting a fair settlement for your distress, come and talk with us. We have the experience, the knowledge, and the compassion to make this process as straightforward and as financially rewarding for you as it can possibly be.


Related Posts