Contingent Fee Agreements

When someone is injured due to someone else’s negligence, and they want to pursue a claim, typically the attorney who represents the injured party takes the case on a contingent basis. This simply means that if there is ultimately no recovery against the negligent third party, there is no attorney’s fee. The fee charged by the attorney in such cases, is typically, 1/3 of the gross recovery, if the case is settled prior to filing suit. Using a sliding scale, attorneys often charge 40% of the gross recovery if it is necessary to file suit, or institute arbitration proceedings. And, although unlikely in most cases, it is common to see 50% of the gross recovery charged if the matter is appealed from a trial verdict or arbitration award (where allowed).

In addition to the contingent fee for the bodily injury claim, it is commonplace for attorneys to charge a nominal administrative fee for first party claims, such as Personal Injury Protection (PIP) claims or Medical-Payment (Med-Pay) claims. These fees are usually not in excess of $150.00, and again should only be charged if there is a recovery from the first party. This is not a money-making charge by the attorney; it is simply designed to off-set what can be a time-consuming, but necessary, effort to obtain medical payments, and possibly wage loss reimbursement, in advance of any recovery from the adverse party.

Finally, claimants should be aware that they are, in addition to fees mentioned above, responsible for any reasonable costs arising out of pursuing the case. These costs may include charges by medical providers for copying records, preparing reports or forwarding itemized statements. The costs go up dramatically if it is necessary to file suit on a case, as depositions need to be paid for and experts need to be compensated, regardless of a positive outcome on the case, and prior to any recovery.

Be aware, all fee agreements must be in writing and signed by both the client and the law firm. Should you have any questions, as always, I’m always happy to assist you. Please don’t hesitate to call!

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