If you are severely injured, it is possible that you no longer work and have no way of paying for hourly attorneys’ fees, let alone the cost of preparing for an expensive trial. On the other hand, the responsible party is usually represented by an insurance company with deep pockets. This has the potential of putting the victim – you – at a severe disadvantage. Contingency fees were created so that anybody can afford an attorney regardless of their financial situation.
What is a Contingency Fee?
A contingency fee means that your attorney will receive a percentage of the settlement or award in your case in lieu of charging you by the hour. If you do not receive a settlement or an award in a case, your attorney will not be paid. Contingency fees agreements typically also provide that you will not be charged for hard costs such as investigation expenses, deposition transcription fees, expert witness fees, etc., thus eliminating any risk of you losing money by retaining a lawyer. The typical rate for most contingency fee agreements is between 33 and 40 percent. However, this percentage can change depending on factors such as complexity of the case, time needed to adequately handle the case, and likelihood of the case being settled before trial.
What Are the Benefits of Hiring an Attorney on a Contingency Fee Basis?
The following are benefits that a contingency fee can provide to both you and your attorney.
- Contingency fees provide extra motivation for your attorney to collect as much money as possible for your case. Due to the structure of a contingency fee, the more money you receive for your claim, the more your attorney will earn as a result.
- Attorneys that offer contingency fee arrangements often look carefully at a case before they accept it. This helps you and attorneys avoid wasting time and resources on a cases that has little chance of winning.
- If the defendant in a personal injury case is a large corporation (like a pharmaceutical company, or car manufacturer), the corporation may try to wait until you can no longer afford to continue litigating and then make a “lowball” offer to settle the case. Contingency fees minimize the risk that you will be forced to accept a bad settlement for financial reasons.
What Cases Will Have a Contingency Payment Option?
Almost every personal injury lawyer uses contingency fees as their primary means of compensation. This applies equally in medical malpractice, product liability and wrongful death cases. Often, but not always, employment law claims and cases dealing with the collection of a large debt are paid with contingency fees. Typically, cases that involve real estate law, business litigation, criminal defense, immigration law, divorce, bankruptcy, and drafting of legal documents (like wills, patents, and trusts) are not paid on a contingent fee basis.
It is important to note that your attorney, even if he or she is paid on a contingency basis, may charge you for reimbursement of resources and other legal charges. Whether you win the case or not, you may still have to pay for things like filing fees and court reports. This is something that you should be clear on before retaining your lawyer.
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