Why contingent fees in injury cases benefit clients
Personal injury cases are torts—wrongful acts, whether intentional or accidental, that result in an injury to another person. Attorney fees in tort cases are usually incurred on a contingency basis. That means the attorney fees, which are usually a percentage amount, are paid out of any settlement, judgment, or award achieved by the lawyer for the client. If there is no recovery, no attorney fees are owed. This arrangement offers peace of mind to the client, reflects the investment an attorney necessarily makes in a tort case, and ultimately results in a fair apportionment of any recovery obtained.
The contingency fee often varies depending on the specific type of case. In motor vehicle collision cases, the standard fee is one-third (33.33%), while in other situations, such as trip-and-fall and medical malpractice cases, the fee can range up to 40% or more. The difference in fee reflects the relative difficulty of the type of case. For example, liability in motor vehicle collision cases is usually easier to prove, especially where a police report squarely ascribes liability on one or more other parties. Medical malpractice cases, however, can be much trickier and demand more time, effort, and expertise from a lawyer. It is also commonplace for the contingency fee to increase if the case goes to trial, because preparing for and conducting a trial can consume weeks of a lawyer’s time.
The benefits of a contingency fee arrangement to the client are manifold:
Because no attorney fee is earned if no recovery is obtained, the client can be sure his or her attorney believes the case has merit and that damages sufficient to justify the attorney’s efforts can be recovered. There is no danger an attorney will take the case merely to bill hours or needlessly drag out litigation in the face of a fair offer to settle.
The interests of the client and the lawyer are clearly aligned: both want to achieve maximum fair value of the tort claim because the lawyer’s fee is a fraction of the amount recovered. The larger the settlement, award, or judgment, the better the client is compensated and the more the attorney earns.
No matter how many hours the attorney invests in the case, the attorney fee will never be higher than the percentage agreed in advance. There is no danger that attorney fees will consume the recovery.
Overall, contingency fees promote trust between attorney and client by creating a common interest and objective.