What Do Contingency Fees Really Mean?

A contingency fee agreement is a payment arrangement which enables a plaintiff who has been injured and is seeking financial compensation to obtain legal representation even if they do not have money to pay an attorney at the start of the case. These fee agreements are customarily used for cases wherein a plaintiff is seeking money damages for some sort of injury.

A client does not have to pay a contingency fee up front. Rather, the agreement is to pay a lawyer a percentage of the client’s award—in the event they in the case. The circumstances of the payment, and how much a lawyer is owed, will be based on the contingency fee agreement.

In summary, the basics of the contingency fee agreement include:

  • The client does not have enough or any money to pay for upfront legal expenses
  • The client and the lawyer form an agreement, which the client does not pay legal fees unless and until they win
  • When the case is won, the lawyer receives a percentage of the client’s recovery as his or her fee.
  • If the client loses the case, there is no legal fee at all for the lawyer

Once a contingency fee agreement is reached, the lawyer will pay the expenses of the lawsuit. These expenses include paying filing fees, arranging for payment of dispositions, and paying for copies of medical records. Additionally, a contingency fee agreement may cover medical liens, which your attorney can deduct and pay all medical expenses before you receive any settlement money, ensuring you obtain the proper medical treatment to make the best recovery from injury possible.

If your lawyer successfully obtains a judgment or settlement on your behalf, whatever is written in the contingency contract will control how your funds are dispersed. Some of these agreements will operate under a graduated percentage contract.

For instance, if a litigation attorney has to file a lawsuit and go to trial, his or her agreement may provide for a higher percentage since court litigation often involves more court fees and attorney fees. On the contrary, if the lawyer does not have to file a lawsuit, but rather resolves your lawsuit through mediation or some other form of alternative dispute resolution, the contingency may provide for a smaller percentage. There are some contingency fee contracts which provide for expenses plus a percentage.

For more information, contact our New York City personal injury lawyers at Lurie, Ilchert, MacDonnell & Ryan LLP today.

Categories: Personal Injury