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Your Guide To Contingency Fees in Personal Injury Cases

 Being injured in an accident means facing several decisions; you’re making decisions regarding your treatment and if it makes more sense to repair or replace your damaged vehicle. You also need to decide if you’re going to accept the insurance company’s initial settlement offer.

Your Guide To Contingency Fees in Personal Injury Cases

Your Guide To Contingency Fees in Personal Injury Cases


If you haven’t already retained legal representation, now is the time to think about finding an attorney and dealing with the fees. Do you pay upfront or on a contingency basis? There are advantages of contingency fees but you can also run into a couple of downsides.

What are Contingency Fees

Contingency fees are a common practice, especially in personal injury cases. Have you ever paid attention to commercials where an attorney promises they won’t get paid until you do? This is a perfect example of contingency fees.


Basically, a contingency fee is a binding agreement between you and your attorney; the agreement states that you’re not being billed by the hour or even the case. Instead, you’re agreeing to give the attorney a percentage of your compensation. For example, if you’re awarded $100,000 in damages and your contingency fee is 10%, you’ll pay your attorney $10,000 out of your settlement.


What is the average contingency fee? There’s no set average. Your attorney may charge as little as 5% or as high as 50%. This is one of those times when it often pays to shop around for a personal injury attorney. However, before you automatically go with the lawyer charging the lowest rate, do a little research.


Sometimes the lowest rate doesn’t necessarily mean you’re getting the best legal representation, and this can also apply to attorneys charging higher contingency fees.

Advantages of Contingency Fees

Not having to pay upfront costs for legal representation in a personal injury case is a huge bonus. After all, you’re already dealing with medical costs, and your injuries may be keeping you out of work. Without a steady paycheck coming in, it’s often difficult to afford attorney costs. With contingency fees, you can have legal representation without worrying about how to pay another bill.


Some people believe attorneys are more motivated when they’re working on a contingency basis—remember, your attorney isn’t getting paid until your case is successfully settled. Since pretty much no one wants to or enjoys working for free, your attorney may be more motivated to settle your case as quickly as possible.


Since their fee is based on a percentage of your settlement amount, they may be more likely to push the insurance company to up their offer. This works out in everyone’s favor, except for maybe the insurance company.


You may be surprised to learn that not every personal injury claim is successfully settled. Sometimes, claims fall apart in court, resulting in the case being dismissed. Why this happens depends on a few reasons. For instance, you may not have grounds for a personal injury claim or the statute of limitations has run out, and these are only a couple of examples of why a personal injury case may fail.


However, even if you lose your case, you’re not on the hook for attorney fees. Since there’s a contingency agreement in place, neither you nor your attorney walk away with any financial gains.

Potential Downsides to Contingency Fees

Agreeing to contingency fees can come with a couple of risks. If your personal injury case is relatively simple to resolve, you may end up paying more in a contingency agreement than in hourly fees. Some attorneys may turn down your case if they consider it to be risky. In other words, they are only looking for personal injury cases that almost guarantee an easy win.


Before you agree to a contingency fee plan, discuss your case with the attorney. Find out how much work your case will involve and inquire about hourly rates. If you’re not completely comfortable with the attorney’s answers, don’t be afraid to take your case to another personal injury lawyer.


Most attorneys offer free consultations, so take advantage of this time to ask any questions you may have about their contingency fee plans.

Can You Lower Your Contingency Fee Agreement

Trying to lower your contingency fee after signing an agreement with an attorney isn’t easy. Remember, you’ve entered into an agreement with a lawyer, and most are pretty good at drawing up ironclad agreements. Finding a loophole is rarely easy, and this is if one even exists.


With this being said, you may be able to petition the court to lower your contingency fee agreement, but don’t get your hopes up. Most courts allow attorneys and their clients to work out a fee arrangement and rarely want to get involved. The judge may see it as setting a bad precedent, but there can be exceptions.


The primary exception is if the court finds the agreement to be unreasonable. So, what will the court look at?


       The amount of time the lawyer spent preparing and working on the case

       The amount of work the lawyer had to turn down to meet the demands of this case

       Typical attorney fees for similar types of cases

       The amount of money in question in the case and the final total amount of damages awarded

       The experience, reputation, and ability of the lawyer

       The likelihood of success in the case


If the court finds that all of the above meet reasonable expectations, you’re probably stuck with the original contingency fee agreement. But, if the court decides one or more terms of the agreement aren’t reasonable, your contingency fee may be lowered.

What About Negotiating with Your Attorney

By all means, go ahead and start negotiating a lower contingency fee with your attorney if you feel the original agreement is unfair. Whether or not you succeed will depend on your case and the attorney.


However, don’t hold your breath. Chances are, your attorney is going to stick with the original fee arrangement.

Contingency Fees May Be Right for Your Case

Each personal injury case carries its own set of circumstances, and this individuality extends to contingency fee arrangements. It's essential to have a thorough discussion with your attorney about the specifics of your case and the details of the contingency fee agreement before accepting it.


Contingency fees, where the attorney's payment is a percentage of the settlement or award, can be advantageous as they often allow access to legal representation without upfront costs. However, it's crucial to fully understand all aspects of such an agreement.


Being fully informed helps ensure that you make a decision that aligns with your best interests and the specifics of your situation. Remember, a good attorney will be transparent and willing to explain all these details to you.

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