Why Contingency Fees are Good for Consumers!

In most severe catastrophic injury and wrongful death cases, personal injury lawyers will agree to take your case on a contingency fee basis. What this means is that you are not charged any up front legal fees and the lawyer will be paid only after the successful completion of your case.

Having said that, many people are not aware of what exactly a contingency fee is. We hope this information helps.

What is a Contingency Fee?

A contingency fee is a fee for legal services paid only if there’s is a favorable result. The law defines a contingency fee as “a fee charged for a lawyer’s services only if the lawsuit is successful or is favorably settled out of court… contingent fees are usually calculated as a percentage of the client’s net recovery.”

For many injured consumers, a contingent fee is their key to the courthouse doors. It makes it easier for people to protect and pursue their civil rights—especially in personal injury and wrongful death cases. If the right attorney is selected, a contingent fee is an excellent way to hire one of the best lawyers in your state without having to pay his or her retainer or hourly fee. It’s truly a win-win for the consumer.

Because of the high risk involved, few attorneys will take cases on a contingency fee basis unless they feel the case has good merit. And when you think about it, that makes perfectly good sense.

Along those same lines, the better result a contingency fee lawyer obtains for you, the greater her contingency fee will be. As such, she has a great deal of incentive to do her very best to maximize the value of your case. Of note is also the in all instances, the attorney is working for you and not the other way around. Your permission is required before your case is settled.

The Contingent Fee Structure

A client is not charged attorney fees if he or she loses the case. If the client recovers money from a settlement or a favorable verdict, the attorney receives a previously agreed to fee from the recovery. Everything is discussed up front and in writing. There are no surprises.

The attorney’s contingency fee varies depending on the country, and even local jurisdictions. The percentage allowed is subject to the ethical rules of professional conduct, and in many circumstances, statutory limitations. Depending on the age of the client and type of case, this range is normally someplace between 25% to 40% in the State of California. In California, contingency fees are also negotiable between the client and lawyer.

The Advantages of a Contingent Fee Structure

A contingency fee arrangement provides access to the courts for those who cannot afford to pay the attorneys fees and costs of civil litigation. Contingency fees also provide a powerful motivation to the attorney to work diligently on the client’s case.

In other types of litigation where clients pay the attorney by the hour, it makes little economic difference to some attorneys whether the client has a successful outcome to the litigation. Finally, because lawyers assume the financial risks of litigation, the number of speculative or unmeritorious cases are reduced.

In the United States, contingency fees are standard in personal injury cases and are less common in other types of litigation. Most jurisdictions in the United States prohibit working for a contingent fee in family law or criminal cases, as made clear by Rule 1.5(d) of the Model Rules of Professional Conduct of the American Bar Association.

It’s interesting to note that in addition to the United States, contingent fees are also allowed and utilized in many other countries around the world such as Australia, Brazil, Canada, the Dominican Republic, France, Greece, Ireland, Japan, New Zealand, and the United Kingdom.