Common use of Priority of Claims Clause in Contracts

Priority of Claims. The Firm may be responsible for allocating the Client’s Recovery to third-parties other than to the Firm and the Client. Should others have any claims against the Client’s Recovery, the Firm establishes the following priority for paying third-parties from the Firm’s trust account held for the benefit of the Client: (1) The Firm maintains senior priority over all other claims from the Client’s Recovery, whether for the Firm’s Contingency Fee or the Firm’s attorney fees, costs of litigation, and out-of-pocket expenses incurred when representing the Client; (2) All third-party vendors directly related to this matter, whether the vendor treats the Client’s injuries or repairs the Client’s property, maintain senior priority over all other claims unrelated to this matter from the Client’s Recovery; (3) All third-party vendors unrelated to this matter maintain senior priority over the Client’s claims from the Client’s Recovery; and, (4) The Client will receive the remaining balance due, if any surplus exists, once the Firm and the other subordinated claims unrelated to this matter have been resolved.