Contingency Fee Agreements In Personal Injury Cases

Contingency fee agreements may be entered into by an attorney and his or her client to set the terms of payment and reimbursement of costs advanced. It is not based on that attorney’s usual hourly rate, but rather, the attorney is paid if and when the client recovers on the claim.

The payment is based on a certain percentage of the client’s recovery. Some attorneys set a different percentage depending upon whether the case is settled early or if it goes to trial. The customary fee is 33% of the total settlement if the case settles before trial commences, and 40% thereafter. If the client is a minor, under the age of 18, the court will usually require that attorney fees be set at a lower amount – usually at the rate of 25%. This amount is usually set by state statute.

Most contingency fee agreements must disclose whether the attorney carries malpractice insurance. Failure to disclose this fact in the actual retainer agreement may be grounds to have the agreement voided and the attorney would then only receive compensation for the actual hours he spent on the case and not by the percentage stated in the agreement, whichever is less.

Generally, even under contingency fee arrangements, the client is ultimately responsible for out of pocket expenses, such as filing fees, copying costs, deposition and expert costs, et cetera. If you dispute your lawyers fee, many have chosen to arbitrate the fee dispute with the local bar association.



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