When individuals are seriously injured due to another party’s negligence, the victims will likely want to enlist a qualified personal injury lawyer’s help in getting full compensation for their damages. In such instances, the injured individuals are not generally required to pay legal fees and expenses upfront. Attorneys usually accept these cases on a contingency fee basis.
In other types of cases, such as criminal defense or legally advising a business, lawyers typically work for a set hourly fee after initially being given a retainer fee to start. Some lawyers charge a flat fee for services such as real estate closings, an uncontested divorce, or creating a will.
However, personal injury lawyers typically handle their cases by agreeing to accept a percentage from settlement proceeds or a jury’s award. In essence, if the attorney does not win the case or settle it favorably for the victim, there will be no payment due for legal services.
How Do Contingency Fees Work?
Through contingency fee arrangements, victims have easier access to legal representation and can pursue compensatory damages from those who caused their personal injury. If no personal injury settlement is reached with this arrangement, no legal fees are due. On the flip side, if a settlement is secured for a victim, the attorney is entitled to receive a percentage amount of the final settlement, as previously agreed.
Typically, contingency fee agreements range from 33 percent to 40 percent of the settlement. The injury victim and the lawyer will negotiate beforehand to determine the percentage. In some instances, an attorney would agree to a reduced amount. A standard contingency fee amount is around 33 percent. With this figure, if a final settlement offer is $60,000, the attorney will receive $19,800 as payment for legal fees. The plaintiff will receive $40,200.
Why Attorneys Impose Contingency Fees
During the claims process, it can prove invaluable for the victim to have a highly skilled personal injury lawyer. An experienced lawyer handles the case’s filing, a complete investigation, and all interventions and dealings with insurance company representatives and legal professionals. This allows the victim to spend time recouping and recovering, rather than worrying about paperwork and deadlines. Additionally, a qualified attorney has the necessary training and experience to develop a compelling case for presentation.
Without the option of contingency fee agreements, many individuals would not be able to hire a good attorney. The exorbitant cost of legal fees would keep legal representation out of range for many people. When a lawyer accepts a case on a contingency fee basis, a victim is afforded needed legal representation and an increased chance of getting deserved compensatory damages with much less risk. Out-of-pocket expenses for plaintiffs are significantly reduced.
An added benefit of the contingency fee payment method is the incentive it provides for lawyers to expend their best efforts in fighting a case. As mentioned earlier, if the case does not end well for the plaintiff, the lawyer does not get paid. Therefore, a contingency fee arrangement allows a plaintiff to hold a lawyer accountable for performing to the best of their ability.
Amount Withheld From Injury Compensation
The amount of money that will be withheld from a victim’s awarded injury compensation depends upon factors such as total medical expenses, the percentage agreed upon for lawyer fees, and any additional accumulated legal expenses. The difference between lawyer fees and legal expenses is as follows:
- Lawyer fees – the amount paid as wages to a lawyer for legal work done. This can be an hourly amount, a flat fee per job or a percentage of the damages won for a plaintiff.
- Legal expenses – costs for moving a lawsuit forward, such as court filing fees, copy costs, travel expenses, deposition costs, hiring expert witnesses, and more.
Other Expenses and Costs Incurred
At times, an injury victim’s lawyer will cover expenses and costs connected to the lawsuit as they arise, then deduct the total from the plaintiff’s share of the settlement. The following is a partial listing of some expenses an attorney may cover upfront:
- Filing fees
- Postage costs
- Police reports
- Medical records
- Trial exhibits and depositions
- Expert witness and investigator fees
Not every lawyer charges for such expenses. If one does, the plaintiff should be informed beforehand.
Attorney Receives Settlement Money First
The settlement check is typically sent to the plaintiff’s attorney. This way, the attorney is assured of receiving payment for legal services provided. A large number of personal injury attorneys only work on contingency cases and could potentially miss payment if the settlement check isn’t sent to their office.
After the check arrives, the lawyer typically provides the plaintiff with an itemized list of charges deducted from the funds, including attorney fees, expenses, and costs. If the plaintiff disputes any charges, it is common for the attorney to place such disputed amounts into a separate trust account for safekeeping until the dispute is resolved.
If Plaintiff Fires Attorney Before Case Ends
If a plaintiff decides to switch attorneys or represent themselves, the original attorney can place a lien for expenses incurred before the switch. If the lien against the settlement proceeds is not correctly recognized and honored, the lawyer can sue the former client and the case’s defendant.
Should an injury victim find the need to terminate an attorney, it is wise to get an agreement in writing from the lawyer that no interest will be sought on expenses or fees in the case. Such documentation should be sent to the defendant before settlement.
Legal Funding Can Help Cover Legal Expenses and Costs
As plaintiffs wait for their settlement to be paid out, medical bills, household expenses, and other living costs will continue to accumulate. Many injured plaintiffs will face financial pressure as they cannot work due to their injuries in the accident. This is where The Legal Funding Group can help. We provide a cash advance on the plaintiff’s lawsuit to stay financially stable during the litigation process.
The money we provide to plaintiffs can be used to pay anything, including legal expenses. Our funding can be used to pay lawyers who charge clients for anything they do not cover upfront, such as filing fees or police reports.
For more information about getting a cash advance on a lawsuit, contact our team today.