Guide
How to Read a Settlement Disbursement Statement
What each line means, what to check against your fee agreement, and what to ask before you sign.
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Published October 26, 2026
A settlement disbursement statement shows where every dollar of your settlement goes: the gross amount, your attorney's fee, case costs, liens, and the net amount paid to you. To read one, start at the top with the gross settlement, check each deduction against your fee agreement and your own records, and confirm the bottom line matches what you expected before you sign.
This guide walks through a settlement disbursement statement line by line, shows a worked $100,000 example, and lists the questions to ask your attorney. Some firms call it a settlement statement, settlement closing statement, or settlement breakdown. They all mean the same document.
This guide is general information, not legal advice. Rules on fees and settlements differ by state and by court.
What is a settlement disbursement statement?
A settlement disbursement statement is the written accounting your lawyer gives you when a contingency fee case settles. It lists the total recovery, everything paid out of it, and what you receive.
In most states you are entitled to one. The American Bar Association's Model Rule 1.5(c), which most states have adopted in some form, says that at the end of a contingent fee matter the lawyer must give the client a written statement showing "the remittance to the client and the method of its determination." In other words, the statement has to show the math, not only the final number.
Two other rules shape what you see:
- Your fee agreement controls the fee. Model Rule 1.5(c) requires a signed, written contingency fee agreement that states the percentage and "whether such expenses are to be deducted before or after the contingent fee is calculated." Keep your agreement next to the statement as you read it.
- Settlement money sits in a trust account first. The settlement check goes into the firm's client trust account (often called an IOLTA account). Model Rule 1.15 requires the lawyer to promptly deliver funds you are entitled to, give a full accounting on request, and keep any disputed amount separate until the dispute is resolved.
How to read a settlement statement, line by line
Most statements follow the same order: the gross amount at the top, deductions in the middle, and your net payout at the bottom. Labels vary by firm, so match each line to the closest row below.
Swipe sideways to see every column.
| Line on the statement | What it means | What to check |
|---|---|---|
| Gross settlement | The full amount the defendant or insurer agreed to pay. | It matches the signed release or settlement agreement. |
| Attorney's fee | The lawyer's contingency fee, usually a percentage. | The percentage matches your agreement, including any higher rate that applies only after a lawsuit is filed or trial starts. Confirm whether it was figured on the gross or on the amount left after expenses. |
| Case costs or expenses | Money the firm advanced to run the case: filing fees, medical records, expert fees, depositions, investigators, copies, postage. | Ask for an itemized list with dates and amounts. Look for any interest or finance charge on advanced costs and whether your agreement allows it. |
| Medical liens and reimbursements | Repayment to health insurers, hospitals, Medicare, Medicaid, or other providers who paid for your treatment and have a legal claim on the settlement. | Each lien names who is being paid and whether it was reduced. Many liens are negotiable, and Medicare reduces its claim to account for attorney fees and costs. |
| Medical bills paid directly | Unpaid provider balances the firm pays from the settlement on your behalf. | You recognize every provider and the balance matches your bills. |
| Pre-settlement funding repayment | Repayment of any advance you took against your case, plus its fees. | The payoff matches a written payoff letter from the funding company. |
| Referral or co-counsel fee | A share of the fee paid to another firm that referred or worked the case. | Whether it comes out of the attorney's fee or is charged to you on top. |
| Holdback or reserve | Money kept in the trust account for a lien or bill that is not yet final. | The amount, what it is for, and when the remainder will be released to you. |
| Net to client | What you actually receive. | Gross minus every line above equals this number. Do the math yourself. |
Example: a $100,000 personal injury settlement breakdown
In this example, the same $100,000 settlement pays the client $45,667 or $47,667, depending on one sentence in the fee agreement. The case has a one-third (33⅓%) fee, $6,000 in case costs, and a $15,000 health insurance lien. The numbers are made up for illustration.
Swipe sideways to see every column.
| Line | Fee on gross | Fee after expenses |
|---|---|---|
| Gross settlement | $100,000.00 | $100,000.00 |
| Case costs | −$6,000.00 | −$6,000.00 |
| Amount the fee is figured on | $100,000.00 | $94,000.00 |
| Attorney's fee (33⅓%) | −$33,333.33 | −$31,333.33 |
| Health insurance lien | −$15,000.00 | −$15,000.00 |
| Net to client | $45,666.67 | $47,666.67 |
The difference is $2,000: one-third of the $6,000 in costs. Neither method is automatically wrong. What matters is that the statement follows what your agreement says. Some states set the method by rule. New Jersey, for example, requires the fee in tort cases to be computed on the net sum recovered after deducting case disbursements. Our guide to gross versus net proceeds explains the two methods in more detail.
The lien line matters just as much. If the $15,000 lien were negotiated down to $10,000, the client would keep $5,000 more under either method.
Run your own numbers: enter your settlement amount, fee percentage, costs and liens in our settlement calculator to see your estimated net payout under both methods.
Red flags on a settlement disbursement statement
None of these proves something is wrong, but each is worth a question before you sign.
- Costs appear as one lump sum, such as "case expenses" or "miscellaneous," with no itemization.
- The fee percentage is higher than the one in your agreement, or a higher trial-stage rate is applied to a case that settled early.
- The fee is calculated on the gross when your agreement says it comes after expenses.
- Liens are listed at the full billed amount with no note on whether anyone tried to reduce them.
- Money is held back with no explanation of what it is for or when you will get it.
- There are charges you never heard about, such as interest on advanced costs or a referral fee added on top.
- The numbers do not add up to the net amount shown.
Questions to ask your attorney before you sign
- Is the fee figured on the gross settlement or after case costs, and where does my agreement say that?
- Can I have an itemized list of every case cost, with dates and receipts for large items?
- Were any costs charged interest, and does my agreement allow that?
- Which liens were negotiated, and by how much were they reduced?
- Is any money being held back? What for, and when will it be released?
- Is anyone else, such as a referring firm, sharing the fee? Does that change what I pay?
- When will I receive my check, and how will it be paid?
- Can I take a day to review this statement before signing?
You are allowed to ask these questions. Under ABA Model Rule 1.15, a lawyer must give a full accounting of client funds on request.
Frequently asked questions
Is the attorney fee taken before or after expenses?
It depends on your fee agreement and your state. ABA Model Rule 1.5(c) requires the agreement to say which method applies. Some states, such as New Jersey for tort cases, require the fee to be calculated after case costs are deducted.
Do I have to sign the settlement disbursement statement?
Most firms ask you to sign it to confirm you approve the distribution. Read it first, and ask questions about anything you do not understand. If you disagree with an amount, the firm should keep the disputed portion in its trust account until the issue is resolved, under Model Rule 1.15(e).
Can I get an itemized list of case costs?
Yes. Ask for it in writing. Model Rule 1.15(d) requires a lawyer to give a full accounting of client funds on request.
Why is Medicare or my health insurer taking part of my settlement?
If they paid for treatment related to your injury, they may have a legal right to be repaid from the settlement. Medicare reduces its recovery by a share of the attorney fees and costs. Other liens can often be negotiated down.
How long after signing do I get my settlement check?
It varies. The settlement funds must clear the trust account, and liens must be resolved before they are paid. Ask your attorney for an expected date and what could delay it.
Is my settlement taxable?
It depends on what the settlement is for. Talk to a tax professional. We will cover the basics in an upcoming guide.
Estimate your net payout. Use the settlement calculator to see how fees, costs and liens change what you take home, then bring your numbers to your attorney.
Sources
- ABA Model Rule 1.5: Fees: written contingency fee agreement, expenses before or after the fee, closing statement.
- ABA Model Rule 1.15: Safekeeping Property: prompt delivery, full accounting, disputed funds.
- New Jersey Court Rule 1:21-7, Contingent Fees: fee computed on the net sum after disbursements.
- 42 CFR 411.37, Amount of Medicare recovery: Medicare's reduction for procurement costs.
- CMS: Demand Calculation Options: Medicare's settlement recovery options.
This article is for general information and is not legal, tax or financial advice.