The Legal Examiner Mark The Legal Examiner Mark The Legal Examiner Mark search twitter facebook feed linkedin instagram google-plus avvo phone envelope checkmark mail-reply spinner error close
Skip to main content

Imagine this:

You were just injured in an automobile accident. Your medical bills are mounting. To make matters worse, you can’t work. Then, the insurance company calls and offers you $500.00 to settle your claim. You need advice, but what do you do, you can’t afford a lawyer at a time like this!

That’s where the contingency fee agreement comes in.

The contingency fee agreement allows people with limited funds to hire an attorney based on the strength of their claim. Most personal injury attorneys work on a contingency fee basis. This means that there are no up front payments. The contingency fee agreement calls for payment at the time that the case is resolved.

The attorney will usually ask for a percentage of the total settlement or judgment. For example, one-third of the total recovery is very common. Most attorneys have an escalated fee clause if the case proceeds to trial. The reason for this is the increased risk and work load of trial. The attorney bears the risk that your claim will fail or that the attorney will lose the case. If this happens, the attorney will be paid $0.00 attorney’s fees, even if he or she worked many, many, hours on your claim.

Attorneys are regulated by a set of rules called the Rules of Professional Conduct. These rules act as a guide for ethical conduct. Under the Rules of Professional Conduct, it is unethical for an attorney to pay the costs of a client’s lawsuit without seeking reimbursement. Under the Rules, a client must remain ultimately responsible for their own costs.

RPC 1.8
A lawyer who is representing a client in a matter:

(e) Shall not, while representing a client in connection
with contemplated or pending litigation, advance or
guarantee financial assistance to his or her client, except
(1) A lawyer may advance or guarantee the expenses of
litigation, including court costs, expenses of
investigation, expenses of medical examination, and costs of
obtaining and presenting evidence, provided the client
remains ultimately liable for such expenses….

Most attorneys will advance client costs up to a point. The attorney will advance the costs, but will expect and is required to be paid back at the conclusion of the case. Some attorneys will require that you pay costs up front. If you pay costs up front, you will not pay them at the conclusion of the case. Even if your case fails, and you receive no settlement, you will be required to pay the costs in your matter. However, you will not be responsible for your attorney’s fees if you have a contingency fee agreement in place.

The contingency fee works because a lawyer would not want to take a case that they don’t think they can win. When you are paying the costs, and the attorney is working without pay for the majority of the case, you both have an incentive to do your part to pursue the claim. Our firm has found that we are able to help many people on a contingency fee basis that would not be able to afford an attorney otherwise. The contingent fee allows anyone with a valid claim access to justice. You don’t have to be rich to hire a personal injury attorney.

Comments are closed.

Of Interest