Gross Recovery vs. Net Recovery in Personal Injury Cases

If you've recently been injured due to someone else's negligence and are considering pursuing a personal injury claim, your first question might be, “What’s my case worth?” To fully understand the answer, it’s critical to know the difference between "gross recovery" and "net recovery." Let's break them down in simple terms.

What is Gross Recovery?

Gross recovery refers to the total amount awarded to a personal injury plaintiff either through a settlement or a court judgment. Think of it as the big, initial number you hear when someone says, "She was awarded $500,000 for her injuries," or "He reached a settlement of $1,000,000." With respect to jury awards, this is the number that the CaseYak calculator predicts. In short, a plaintiff's gross recovery is the amount that he or she receives before any expenses or debts are paid from the judgment or settlement proceeds.

What is Net Recovery?

As you can guess, the gross recovery is not the amount the plaintiff actually takes home. Enter net recovery.

Net recovery is the amount the plaintiff actually receives after all the expenses associated with the case are deducted from the gross recovery. Think of it as the real, pocketable amount after all the dues are paid. There are different types of expenses that a personal injury might expect to pay from the gross recovery.

What expenses are deducted from the Gross Recovery?

Several costs can reduce the gross recovery to the net recovery, such as:

Attorney's Fees: If you hiree a lawyer (which is often recommended for personal injury cases), they typically work on a contingency fee basis. This means they take a percentage of your recovery. It should be mentioned, though, that the data shows that personal injury plaintiffs who hire attorneys usually recover much higher settlements and verdicts, such that it more than makes up for the fees they take out.
Medical Bills: If you received medical treatment for your injuries, these bills often get paid out of your recovery, especially if your insurance company has placed a lien on your settlement. If you hired an attorney, they will help you settle all these liens.
Court Costs: Filing fees and other court-related expenses can add up.
Investigation Costs: This includes fees for obtaining medical records, police reports, and other necessary documents.
Deposition and Expert Witness Fees: Sometimes, experts need to testify on your behalf. In an injury, many experts are medical doctors, and their services can be costly.
Miscellaneous Expenses: Other expenses, like postage, copying, travel for court appearances, and other small charges also factor into the amount of net recovery as compared to gross.

Real-world Example:

Let's look at an example to illustrate the difference:

Gross Recovery: $100,000 (Amount awarded by the court or through a settlement)
Attorney's Fees (30%): $30,000
Medical Bills: $20,000
Court and Investigation Costs: $5,000

Net Recovery = Gross Recovery - (Attorney's Fees + Medical Bills + Court and Investigation Costs)

Net Recovery = $100,000 - ($30,000 + $20,000 + $5,000)

Net Recovery = $45,000

So, in this example, out of a $100,000 award, the plaintiff would actually take home $45,000.

Conclusion:

Understanding the difference between gross and net recovery is essential in setting realistic expectations for what you might receive at the end of a personal injury case. Always consult with a personal injury attorney to get a clearer picture of the potential expenses and your potential net recovery.

Please be advised that this is provided for general information purposes only. No attorney-client relationship is formed by the provision of this information. The best resource for information about your case is consulting an attorney.