A contingency fee is an arrangement where a lawyer’s pay is determined by a case’s outcome. Clients pay nothing upfront and, if they prevail, their attorney gets a portion of the settlement or award. If a case isn’t successful the lawyer gets nothing but the client may still be responsible for litigation costs. Read on for a brief explanation of how contingency fees work.
How Much Are Contingency Fees?
As explained above, a contingency fee is a portion of the lawsuit recovery, and the amount the attorney gets is contingent on the case’s success. Percentages are negotiable but they have to be reasonable, and they’re clearly stated in the client/attorney retainer agreement. This agreement also states whether the contingency fee is computed after or before expenses.
The average contingency fee is roughly one-third of the lawsuit’s recovery. Some lawyers work on a sliding scale, where percentages are determined by the length to which the case progresses. Even though the client pays no expenses until settlement, it’s wise to monitor costs and for personal injury attorneys Easton to send bills regularly.
Can a Judge Raise or Lower a Contingency Fee?
Clients and attorneys receive a great deal of latitude in negotiating arrangements for contingency fees; in some cases, fees up to 45% have been approved. Courts use the following factors in determining the reasonableness of a contingency fee arrangement:
* Whether the lawyer was kept from taking on other work
* Typical fees for similar cases
* The size of the recovery
* The lawyer’s reputation and experience
When Are Contingency Agreements Used?
A contingency arrangement gives a client the opportunity to access legal services they’d otherwise never be able to afford. From a client’s point of view, such an arrangement is preferable in a risky case and should be avoided in cases that are clear cut. These agreements are often used in personal injury and property damage cases, in class action suits, and in litigation where there’s a significant settlement at stake.
In certain cases, contingency fee arrangements are barred; rules vary by jurisdiction, but agreements are typically prohibited in criminal cases, divorces, child support cases and property settlements. However, these agreements can be a great tool for those who believe in the strength of their case but cannot afford to pay personal injury attorneys in Easton out of their own pocket.