What Is A Contingency Fee?
How Do Personal Injury Lawyers’ Fees Work?
The contingent fee is the usual arrangement used by personal injury lawyers. It specifies that the lawyer’s fee is a percentage of the money he collects on your behalf for your injury. The word “contingent” means that if, for any reason, there is no money recovered, the lawyer will receive nothing for the time he spent representing you. The percentage can vary depending on the lawyer and the nature of the case. Section 6147 of the Business and Professions Code requires contingent fee agreements to be in writing and that the fee is negotiable.
Why Have A Contingency Fee?
The contingent fee accomplishes several objectives beneficial to the injured client:
It inhibits clogging up our already crowded legal system by weeding out cases with little or no merit. Few experienced attorneys are willing to risk their valuable time and their own money on cases that have little chance of success. Most injured people prefer to know at the outset if their case has merit. If a lawyer won’t accept a case on a contingent fee basis, that’s a good indication that the case doesn’t have merit. It’s always a good idea, of course, to get a “second opinion.”
It enables the injured person to obtain the services of experienced attorneys at a time when their finances may be depleted, or at least reduced, by an accident. In most cases, the accident has at least temporarily eliminated the victim’s earning power and caused substantial unanticipated expenses. Ever-increasing medical costs often exceed the victim’s own insurance benefits. If the accident victim does not have his own insurance, medical bills can be overwhelming. Under these circumstances, most injured people do not have sufficient funds to pay an attorney’s retainer and hourly fees in addition to other financial obligations caused by the accident. The same is not true for the insurance company against whom the claim must be asserted. Insurance companies have vast resources and pay their lawyers generous hourly fees.
It eliminates the client’s financial risk of losing his case. Because the fee is contingent, the lawyer does not earn a fee until money is collected for the client. If no money is collected, the lawyer doesn’t get paid and the client is not responsible for any fee to the lawyer. Make sure that this is clearly spelled out in a written agreement with the lawyer. You should get a copy of the agreement signed by the lawyer.
The contingent fee provides the lawyer with the purest form of incentive to get results – the more money he obtains for you, the more he earns for himself. It also provides the incentive to resolve the case as soon as possible. The incentive for insurance lawyers, who work on an hourly basis, is to maximize the number of hours they expend on a case.
The contingent fee assures the client there is a relationship between an attorney’s efforts and experience, and the results. It is one of the few professional relationships where the professional’s fees are dependent solely upon the results achieved for the clients.The insurance industry is continually fighting to reduce, control or eliminate the contingency fee. They know that it is the only fee arrangement that allows an accident victim to obtain experienced lawyers to fight for their rights. Without the contingent fee, most people could not bear the financial burden and risk of obtaining legal help, and without experienced legal help, there is little hope that he could get fair compensation from an insurance company. To learn more about our contingency or how we can help you with your personal injury case give us a call today.
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Important Legal Terms
Legal definitions and explanations of various topics related to personal injury claims and insurance issues.
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