When you’re in an accident, hurt or suffer damages, you might work with a personal injury lawyer. When you hire a lawyer in any situation, your top priority might be how much it’s going to cost.
Personal injury lawyers are unique because most charge on a contingency fee basis, although that’s not universally true. Some personal injury attorneys will charge by the hour, although that’s rare.
Even when your attorney is paid a contingency fee, you may have other costs and expenses that you’re responsible for paying when your case is over. That can come as a surprise to some people. With that in mind, below is what you should know about how an attorney will charge you in a personal injury case and whether you might have options to manage the costs and expenses.
What is a Contingency Fee?
A contingency fee agreement means that when a lawyer agrees to take your case, you don’t have to pay them upfront. They’re only paid if you recover compensation. That compensation can come in the form of a settlement or a judgment if your case goes to trial.
The idea, as the name implies, is that your attorney is paid for their service is contingent upon you receiving some type of compensation.
When you hire an attorney in these situations, they’ll take a pre-agreed-upon percentage of your recovery. The percentage is usually 33% or somewhere around that. The exact amount of a contingency fee can vary depending on the complexity of your case and how much risk your attorney is taking on, as well as who’s paying for litigation costs and when.
The more challenging or complex a case, the higher your contingency fee may end up being, although they’re not usually more than 40%. In a simple matter that’s likely to end up in recovery, your attorney’s fee may be as low as 20%.
There is an incentive here for attorneys. The more money they can recover for their client, the more money they’re going to make. There’s also a benefit in the fact that you can get legal representation even if you couldn’t otherwise afford to pay a lawyer.
What Are Costs?
While a contingency fee payment agreement can seem like a good option, there are other costs you have to consider. You won’t have to pay them upfront typically, but they can add up.
Costs aren’t what you pay to your attorney in fees. Instead, in a legal setting, costs are the expenses paid by your lawyer’s office when they’re working on your claim. For example, these are the costs to perform investigations and hire expert witnesses. Other costs considered unavoidable in a personal injury case include court filing fees and copies, depositions, and scheduling special court proceedings.
General categories of costs that aren’t your attorney’s fees include:
- Investigation and information-gathering, such as research
- Deposition costs, which is when sworn, non-trial testimony is taken
- Administrative expenses, including travel and making copies
- Hiring expert witnesses, such as doctors and other medical professionals
- Court costs, which can include filing fees, paying a stipend for jurors, and serving the summons on the defendant
Your agreement with your attorney may require that you repay the lawyer for these costs. It’ll usually come out of your final settlement.
If you’re paying a contingency fee, your agreement that you initially sign with your attorney should state how costs and other expenses will be paid. The two main options are whether costs are deducted from your final amount of compensation before or after the fee percentage is calculated by your attorney.
If your lawyer calculates the fee percentage first and then deducts the costs, then your attorney’s fee is more, and you receive a smaller amount of compensation compared to the costs being deducted before your attorney’s percentage.
Is There Anything You Can Do?
There will inevitably be costs for an attorney to represent you in a personal injury case, so can you manage these in any way?
First, be very clear on what agreement you’re signing with your attorney before going through with it. Read it carefully because it will tell you everything you need to know and help you avoid any surprises.
Beyond that, you should set up an arrangement with your attorney so that if they go over a certain amount in costs and expenses, they have to ask your permission before proceeding. You may still end up having to pay the expenses, but again, you’ll be more aware of what to expect.
Understanding the differences between costs and fees is essential.
By Susan Melony