Many personal injury lawyers throughout the country handle their cases on a contingency fee basis. Under a lawyer-client contingency fee agreement, the attorney does not receive compensation unless and until the client recovers monetary compensation in some form. In some instances, the compensation may come from a favorable monetary settlement from the at-fault party’s insurance company.
At other times, it may come from a favorable jury verdict or arbitration award. In any case, the attorney receiving a fee is contingent upon the outcome of the case (the client recovering monetary compensation in some form).
Sometimes, the attorney takes their fee before deducting litigation expenses, while at other times, attorneys take these fees after they have deducted their expenses.
If you are thinking about hiring a particular attorney to handle your personal injury case, you should read the attorney’s contingency fee agreement very carefully and make sure that you fully understand the entire agreement. If you have questions about the agreement, such as how and when the attorney receives their fee, the lawyer can answer those questions for you. Then and only then should you sign the contingency fee agreement.
Making sure that you understand an attorney’s contingency fee agreement is essential to having the best possible attorney-client experience and achieving the best possible result in your case.
Types of Personal Injury Claims
One of the most common areas of the law using contingency fee agreements is in personal injury cases. An accident victim may bring a personal injury insurance claim or file a personal injury lawsuit if they suffer an injury in an accident that occurs because of another person or entity’s negligence. The injuries that an accident victim may suffer depend primarily on the nature and severity of the accident.
In a relatively minor car accident, for example, the accident victim may suffer one or more soft tissue injuries, such as muscular sprains, strains, and contusions. In more serious accident cases, however, the accident victim can suffer a traumatic head or brain injury, a spinal cord or paralysis injury, or a fractured or broken bone.
The nature and severity of an accident have a lot to do with the personal injuries that the accident victim ultimately suffers. Some motor vehicle accidents happen when the driver of another vehicle behaves carelessly under the circumstances or engages in distracted driving (such as by texting or calling while trying to operate a motor vehicle at the same time).
Motor vehicle collisions are a common type of accident that can lead to personal injuries, and personal injury lawyers will often utilize contingency fee agreements when they retain clients. Settlements reached in motor vehicle accident cases (the source of recovery for the accident victim and the attorney) often come from the insurance company for the at-fault motor vehicle driver.
Similarly, bicycle and motorcycle accidents can lead to serious personal injuries, most especially for the operator or rider. When a large motor vehicle collides with a much smaller vehicle, the occupant of the smaller vehicle can fall to the ground and suffer serious injuries, including broken bones, neck injuries, and back injuries, including paralysis.
When these accidents happen because of a motor vehicle driver’s negligence, the accident victim can bring a claim against that individual (and indirectly, against the at-fault driver’s motor vehicle insurance company).
In addition to accidents involving vehicles, premises accidents can lead to serious injuries for individuals who occupy and visit properties that belong to someone else. Property owners have a duty to ensure that the premises they own and operate are in a reasonably safe condition at all times and are hazard-free. Sadly, however, this does not always happen, and premises accidents, such as slip and falls, can occur.
Premises accidents and injuries also result from poor security on the premises and improper maintenance of escalators, elevators, and other devices on the property.
Personal injuries can also occur when dangerous dogs are allowed to roam the neighborhood at large and attack or bite unsuspecting individuals. Some jurisdictions require that a dog owner do something wrong (such as failing to properly restrain the dog with a leash) for them to be liable for the resulting injuries.
However, in other jurisdictions, dog owners can be liable for injuries inflicted by their dog without regard to negligence. In any case, dog bite victims may be in a position to file a claim or lawsuit against the homeowner’s insurance company for the dog owner to recover monetary compensation for the injuries sustained.
Finally, personal injury cases can result from accidents that occur on watercraft, such as boats, yachts, and cruise ships. The owners of these watercraft have a duty to ensure that common areas are reasonably safe for visitors. Moreover, when there is a known defect, they are responsible for taking measures to make the area safe or to warn about the hazard or defect.
Pilots must operate their watercraft safely and follow all of the applicable boating regulations. When boat owners and operators are negligent, individuals on board can suffer serious injuries.
In virtually all of these types of personal injury cases, attorneys typically use contingency fee agreements. By speaking with a prospective attorney about your case, you can find out how the contingency fee agreement will work, what the attorney’s fee percentage will be, and who will be responsible for paying the expenses associated with litigation (and when).
Medical Malpractice Claims
Just as with personal injury cases, in most jurisdictions throughout the country, attorneys who handle medical malpractice cases utilize contingency fee agreements when working with clients. Contingency fee agreements in medical malpractice cases work in essentially the same way as in personal injury cases. Specifically, the attorney’s recovery of a fee is contingent upon the medical malpractice plaintiff recovering monetary compensation by way of a settlement, jury verdict, or arbitration award.
Medical negligence and medical malpractice cases arise when healthcare providers make mistakes, resulting in a patient suffering a serious injury or illness. Healthcare providers, including doctors and nurses, owe their patients a high duty of care. Specifically, they are required to act with the standard of care of a reasonable doctor or nurse acting under the same or similar circumstances. A national standard of care typically applies to healthcare providers who are specialists, such as cardiologists and orthopedic doctors.
To demonstrate that a healthcare provider behaved negligently under the circumstances, the injured or ill patient must ordinarily submit a certificate of a qualified expert. A qualified expert is an individual who can testify that evidence exists to support that the treating doctor or other healthcare provider made a medical mistake and breached the applicable standard of care under the circumstances.
Individuals who feel that they or their loved ones have been victims of medical negligence or medical malpractice should contact an experienced attorney for help right away. In most of these types of cases, attorneys will utilize contingency fee agreements. The agreement will lay out the percentage fee that the attorney will receive, as well as who will pay the expenses associated with litigating the case. Should you have any questions or concerns about the agreement, ask the attorney as soon as possible.
What Distinguishes Contingency Fee Agreements From Other Types of Fee Agreements?
Contingency fee agreements are only one type of attorney-client agreement.
Other fee agreements include:
- Hourly fee agreements
- Retainer fee agreements
- Flat fee agreements
However, contingency fee agreements are different from these other types of agreements. Under a contingency fee plan, the lawyer does not require payment to start representation or keep track of every hour worked for billing. In fact, a lawyer does not even receive a fee at all unless the client prevails in the case.
The client must receive financial recovery by way of a settlement, jury verdict, or arbitration award, for the lawyer to receive a fee. This fee will come directly from the settlement or award payment, and it will be a percentage of your recovery that you previously agreed to. The contingency fee agreement should list the lawyer’s age fee.
In personal injury and medical malpractice cases, settlements are fairly common. In fact, the majority of these cases settle long before the case ever goes to a jury trial. However, in some instances, the parties reach an impasse and choose not to settle a case. At those times, a jury must decide the case and determine what, if any, damages the plaintiff should receive. Similarly, if the parties agree to arbitration, then a neutral, third-party arbitrator decides the issue of damages.
The rules of professional conduct apply to most jurisdictions, and require all contingency fee agreements in writing and that the client signs them. In addition, the agreement must state the percentage that the attorney will receive at the end of the case, depending on whether the case settles, goes to a jury trial, or goes before an arbitrator.
If you are thinking about retaining an attorney to represent you in a personal injury or medical malpractice case in your area, you should make sure that you read the contingency fee agreement carefully, that you understand it, and that you ask questions if you have any. You should never sign any document you don’t understand.
How Personal Injury and Medical Malpractice Cases Are Typically Resolved
How a personal injury or medical malpractice case resolves has a lot to do with the amount of the contingency fee that the lawyer will receive at the end of the case. For example, a lawyer is likely to charge a higher contingency fee percentage in the event the case goes to a jury trial or arbitration, as opposed to settling out of court.
The vast majority of personal injury and medical malpractice cases settle before they ever reach the courtroom. In fact, many courts and judges will encourage the parties to do everything that they possibly can to settle a case. Settling cases eliminate the need for a trial and save judicial and court resources.
In personal injury and medical malpractice cases that are especially complex, the parties may need to negotiate for many weeks or months before reaching a final settlement number. If the case settles before the plaintiff files a lawsuit, the attorney’s contingency fee percentage will likely be lower than if the plaintiff files a lawsuit or if the case proceeds to a jury trial or arbitration.
Not all personal injury medical malpractice cases settle out of court. The parties may have fundamental disagreements about who is at fault or the damages the plaintiff is eligible to recover in the case. In that instance, a jury trial may become necessary. The plaintiff is the ultimate decision-maker when it comes to accepting a settlement offer before taking the case to trial. Therefore, if the plaintiff does not feel that the settlement offer is sufficient to compensate them, the plaintiff may decide to pursue a jury trial.
At a jury trial, the jury decides what, if any, damages the plaintiff should recover and decides any other outstanding issues in the case. When determining damages, the jury members are supposed to only rely upon the evidence that the parties present at trial. If the jury decides to award the plaintiff money, a portion of that award will compensate the attorney for their services. In most instances, when a case goes to a jury trial, the attorney will charge a higher contingency fee percentage than if the case had settled out of court.
As an alternative to a costly and lengthy jury trial, some personal injury and medical malpractice cases go to arbitration. During arbitration, the parties present their case before a neutral, third-party arbitrator. In some instances, these arbitrators are retired judges, while at other times, they are practicing attorneys. The arbitrator will listen to all of the evidence that the parties present during the arbitration hearing. They will also review all of the medical evidence and other testimony that the parties present.
Finally, the arbitrator will decide the outstanding issues in the case, one of which may be damages. Therefore, it is the arbitrator who will decide what if any damages the plaintiff should receive. As with a jury trial, the attorney handling the case for the plaintiff will recover a portion of the arbitration award as their fee. The arbitration agreement and the attorney’s contingency fee agreement should spell out the attorney’s percentage of the award.
Determining the Attorney’s Fee Percentage in a Contingency Fee Agreement
There are several factors that attorneys use to determine the percentage fee to include in a contingency fee agreement. Those factors include the amount of risk that an attorney undertakes in the case, the complexity of the personal injury or medical malpractice case, and the time when the case reaches a final resolution.
Many attorneys are willing to adjust their fees based upon expectations and the result that the case ultimately achieves. However, unless you hear otherwise, you should always assume that the percentage stated in the original agreement will apply at the end of your case.
Factors That Influence an Attorney’s Contingency Fee Percentage
Not all contingency fee agreements are the same by any means. In fact, these agreements are often very different, depending upon the type of case involved, the issues involved, the complexity of the case, and the attorney who is drafting the agreement. There are several types of factors that affect the attorney’s fee percentage in a contingency fee agreement.
Those factors include:
- The amount of risk associated with taking on the case – One of the main factors that will influence the fee percentage in an attorney’s contingency agreement is the risk involved in taking on the case. For example, there may be a liability dispute in which the negligent individual’s insurance company is disputing fault. In those types of cases, the attorney may insist upon a higher fee simply because they take on a greater amount of risk.
- When the case ultimately concludes – The time when the personal injury or medical malpractice case ultimately concludes can affect the attorney fee percentage. For example, if the case settles before the plaintiff ever files a lawsuit in the state court system, the contingency fee percentage will probably be lower than if the plaintiff did file. In addition, if the attorney has to take the case to trial or binding arbitration, the attorney’s fee will likely be more than if the case settles at some point during the litigation process.
- Attorney experience – When it comes to determining an attorney’s fee percentage as part of a contingency fee agreement, the attorney’s experience is a big factor. In addition, attorneys who are more experienced at personal injury or medical malpractice cases are likely to use a higher contingency fee percentage than an attorney who is less experienced in those areas of the law. In addition, attorneys who have practiced for longer than other attorneys may use a higher contingency fee percentage in their contingency fee agreement.
- The complexity of the issues in the medical malpractice or personal injury case – The complexity of the issues involved in a personal injury or medical malpractice case can have a direct impact on the contingency fee percentage that an attorney uses in the agreement. For example, if a particular case is likely to require a large amount of investigation to determine fault, the attorney may charge a higher contingency fee than if the case were likely to be resolved with a letter or a phone call. Moreover, if the case is going to require a significant amount of litigation to resolve, the attorney’s contingency fee percentage will likely be higher than in a simpler district-court-type case.
In addition to all of the other requirements, an attorney’s contingency fee percentage must be reasonable under the circumstances. Again, the reasonability of an attorney’s fee depends upon the issues involved in the case, the stage of the case when the parties reach a resolution, and the attorney’s level of experience. For a contingency fee percentage to be reasonable, it must usually be less than fifty percent (50 percent) of the gross compensation awarded to the plaintiff in the case.
Attorney Services That a Contingency Fee Compensates
Whenever a lawyer decides to take a personal injury or a medical malpractice case on a contingency fee basis, they are taking a risk that the plaintiff will ultimately be successful in the case. Throughout the case and during the litigation process, there are many services that the lawyer provides or which they receive compensation after the case.
For example, at the beginning of the case, the lawyer may have to investigate how the accident happened or how the incident of medical malpractice or medical negligence likely occurred. The lawyer will also have to collect all of the plaintiff’s medical records and bills and submit that information to the at-fault party’s insurance company as part of a settlement demand package.
The lawyer will then take part in settlement negotiations, which can take many weeks or months. In addition, if the plaintiff is not willing to accept the top settlement offer that is pending, the lawyer must draft a complaint against all potentially at-fault parties in the case and file a complaint in the state court system. Once the attorney files the complaint, they will have to take part in the litigation process. This process often includes answering written questions, called interrogatories, ensuring document production, and taking depositions.
In addition to all of this written work, attorneys have to attend all hearings that take place in court, including pre-trial hearings, settlement conferences, and alternative dispute resolution hearings. If the case ultimately settled before a jury trial, the attorney is responsible for wrapping the case up and ensuring payment to all outstanding medical bills and liens.
However, if the plaintiff decides that they want to take the case to trial, the lawyer must handle the trial, ensure that all witnesses are present, and do everything possible to help the plaintiff achieve the best possible result at trial. Alternatively, if the plaintiff decides to pursue alternative dispute resolution, such as mediation or arbitration, the lawyer must prepare for and attend these hearings as well.
Expenses in Addition to an Attorney’s Contingency Fee
In addition to the attorney’s fee, expenses related to a personal injury or medical malpractice case require payment, both before and after a lawsuit is filed. The contingency fee agreement should explicitly state who is responsible for paying those expenses and should also describe the point in time those expenses receive payment. Common fees and expenses associated with personal injury and medical malpractice cases include expert witness fees, investigation fees, overhead fees, filing fees, and discovery fees.
In many personal injury and medical malpractice cases, plaintiff lawyers must retain the services of an investigator or a medical expert. Investigators, including accident reconstructionists, are necessary in some cases to prove fault for a particular accident. In the case of a medical expert, a doctor may need to causally connect an injury to an accident or a specific act of medical malpractice. These experts cost money and are common expenses associated with litigation.
Litigation also comes with a myriad of overhead fees. For example, plaintiff attorneys often have to pay fees to obtain copies of medical records and bills from medical treatment providers. In addition, attorneys often have to pay filing fees if the plaintiff decides to file a lawsuit in the court system. In addition, plaintiff attorneys must pay the postage costs associated with mailing and exchanging discovery between the parties during litigation.
Finally, taking depositions during the litigation stage of a personal injury or medical malpractice case can be costly. The party who is taking the deposition ordinarily has to pay the costs associated with a court reporter. Moreover, attorneys who wish to have a copy of the deposition transcript must pay for those copies.
A lawyer’s contingency fee agreement should establish who will pay the costs associated with a personal injury or medical malpractice case. The agreement should also detail the point in time when these expenses receive payment. In some instances, depending upon the attorney, expenses are deducted from the gross settlement award, jury award, or arbitration award before the attorney’s fee.
At other times, these expenses do not receive payment until after the attorney receives their fee. If you have any questions about who will pay the litigation expenses in your personal injury or medical malpractice case or when you will need to pay for these expenses, you should speak with your attorney before signing the contingency fee agreement.
Speak to Your Attorney About Any Contingency Fee Agreement Questions You May Have
There are many types of fee agreements in the legal world besides contingency fee agreements. These types of agreements include retainer fee agreements, where a client pays a certain amount of money towards a retainer at the beginning of the case, which they may have to replenish over time. They also include hourly fee agreements and flat fee agreements.
In an hourly fee agreement, the attorney usually bills by the hour (or by the fraction of an hour) and may then bill the client every month. With a flat fee agreement, the client agrees to pay a certain amount of money before the lawyer enters their appearance in the case.
There are certain benefits and detriments associated with attorney contingency fee agreements. One of the biggest benefits to a contingency fee agreement is that the client does not owe any attorney’s fees if they are unsuccessful in the case and does not recover monetary compensation. For example, if the client decides to take the case to trial, and the jury does not return a favorable verdict, the client will not owe any attorney’s fee. However, in cases that an attorney could resolve with a simple phone call or letter, a contingency fee agreement is probably less favorable than an hourly fee.
When it comes to contingency fee agreements, you must read the agreement completely and ask any questions before you ultimately sign it. If you sign the agreement and return it to the attorney, the lawyer will assume that you understood the agreement and everything that is in it.
In particular, you should make sure that you understand who is responsible for paying all of the expenses associated with the case and when those expenses will come out. By reading and understanding a contingency fee agreement, you increase your chances of your case turning out favorably and with as little confusion or contention as possible.
The best aspect of contingency fees is that injured accident victims do not have to worry about whether they can afford legal assistance. With medical bills and losses piling up, having to pay a retainer to get legal representation can seem impossible. With hourly fees, those costs can often exceed the recovery a victim receives. This is why contingency fees benefit personal injury clients. Contact Brauns Law Accident Injury Lawyers, PC personal injury lawyers to learn more.
