Most of us are fortunate to not interact with the legal system often. But when the need arises – such as after an accident – you may find yourself in a crisis, wondering how you will pay for a lawyer. Fortunately, most California personal injury lawyers work on a contingency fee basis.
A contingency fee arrangement is a contract between a lawyer and a client. If the client recovers money through a settlement or verdict at trial, the attorney is paid a percentage of that money. If the client loses, then the attorney does not get paid.
With a contingency fee arrangement, you pay no money upfront – making it possible for the average person to get the legal help that they need. This type of fee agreement also aligns your attorney’s interests with your own: they only get paid if you win, and the more money that they recover for you, the higher their compensation. If you have been hurt in any type of accident, a San Rafael personal injury lawyer can help you get the compensation that you deserve.
Contingency Fees in California Personal Injury Claims
When you are hurt in an accident, you may find yourself in a difficult financial situation. You may have mounting medical bills, property damage to cover, and even lost wages. This can make it hard to even think about hiring a lawyer.
Most California personal injury lawyers do not require you to pay anything upfront. Instead, they work on a contingency fee. With a contingency fee, you only pay attorney’s fees if you win the case. The attorney’s fee will be a percentage of the compensation that you recover either through a settlement with the insurance company or a verdict at trial.
A typical contingency fee percentage is anywhere from 30 to 40% of your recovery. Your contingency fee agreement will set out the exact percentage. These percentages are often staggered so that your lawyer will get a higher percentage if the case goes to trial – which requires more time and work for their law firm.
For example, if you are injured in a car accident and suffer $100,000 in damages, you may hire a lawyer and sign a contingency fee agreement for 33.5% of your recovery if the case is settled, and 40% if your case goes to trial. If the case is settled for $100,000, then your lawyer would be paid $33,500, leaving you with $66,500 (minus costs). If the case goes to trial and you get an award of $100,000, your attorney will get $40,000 in fees, while you get $60,000 (minus costs).
Under California law, in order to be valid, a contingency fee agreement must include:
- A statement of the contingency fee percentage amount;
- A statement as to how disbursements and costs will affect the contingency fee and the client’s recovery;
- A statement as to what extent, if any, the client could be required to pay any compensation to the attorney for related matters that arise out of their relationship not covered by their contingency fee agreement. This may include any amounts collected for the client by the attorney;
- Unless the claim is related to medical malpractice, a statement that the fee is not set by law but is negotiable between the attorney and client.
Before signing a contingency fee agreement, you should carefully review the document. Be sure to ask questions about what each provision means. You may also choose to seek advice from another attorney about the contract.
What Are the Benefits of Contingency Fee Arrangements?
Contingency fees are not required in personal injury cases. However, most personal injury law firms use this type of fee agreement because it makes the most sense for both the attorney and the client.
This type of fee agreement allows injury victims who otherwise could not afford to hire a lawyer to seek counsel. They can do so without risk, because (in most cases) they are not obligated to pay their lawyer a fee if they don’t recover money in their case.
At the same time, contingency fee arrangements align the attorney’s interests with the clients. Because the lawyer only gets paid if the client does and their fee is based on a percentage of the recovery, contingency fees motivate attorneys to work as hard as possible to get the maximum possible recovery for their clients.
Who Pays Court Costs and Other Fees?
The biggest expense of pursuing a legal claim is typically the attorney’s fees. However, there is a range of other expenses associated with filing a lawsuit. These costs may include:
- Filing fees
- Court reporters’ fees for depositions
- Reasonable costs for copies, postage, and other expenses
- Fees for expert witnesses and investigators
- Fees for a sheriff or process server to deliver or serve a complaint, summons, or subpoena
With most contingency fee agreements, the client is not required to pay any of these costs upfront. Instead, the lawyer pays for these fees and keeps track of them.
Many contingency fee agreements provide that the client will reimburse the attorney for these costs if they win a settlement or verdict at trial. These contracts may also stipulate that if the client does not win their case, the attorney will agree to eat the costs. This gives injury victims another incentive to hire a personal injury lawyer, knowing that they will not have to pay court costs and other fees if they lose.
Of course, each fee agreement is different, and you should carefully review any contingency fee contract that a lawyer may ask you to sign. Talk to your attorney, and ask them to explain exactly what you will and will not have to pay depending on the outcome of your case.
Can the Court Make the Other Party Pay My Attorneys’ Fees?
It can be frustrating to realize that after you were hurt in an accident because of someone else’s negligence, you will have to pay a lawyer in order to get compensation for your losses. This often brings up the question of whether you can somehow get the other side to pay for your costs and fees.
California follows the “American Rule” when it comes to attorneys’ fees (as do most states). Under the American rule, each side pays its own attorneys’ fees, win or lose. There are limited exceptions to this rule, such as in cases where the parties have a contract, and the agreement specifies that one side will pay the other’s attorneys’ fees.
In most cases, this means that you will be responsible for paying your own attorneys’ fees out of the proceeds of any award or settlement that you receive. If you have questions about this, be sure to consult with your San Rafael personal injury attorney.
Is There Another Type of Fee Arrangement that I Could Use?
Law firms can use a number of different fee arrangements, as long as they comply with California law. One of the most common fee agreements is for an hourly rate. A law firm will ask a client to pay a retainer upfront and then will bill clients for each hour that they spend working on the case.
Some attorneys work for a flat fee. This is common in criminal cases, where a lawyer may be able to predict the typical time and work that will go into the case. Flat fees are unusual in personal injury cases.
For injury victims, contingency fees often make the most sense. Paying an hourly rate is simply not possible for most people, as they may receive bills for hundreds or even thousands of dollars each month at a time when they are unable to work or struggling to pay bills. While a personal injury law firm may agree to work for an hourly rate, a contingency fee agreement is the most common arrangement.
What Happens If I Switch Lawyers?
In California, you have the right to be represented by the attorney of your choice. With a few limited exceptions, you can switch lawyers at any stage of your case. You can do this for any number of reasons, like your attorney not answering your calls, disagreeing with your lawyer’s legal strategy, or even if you simply stop trusting your attorney.
If you do decide to change lawyers, you will not be required to pay two separate attorney’s fees. Instead, your lawyers will split the attorney’s fee once your case is resolved. Your original lawyer will be entitled to the reasonable value of the services rendered to you. This may be determined by the contract that you signed with the attorney, or based on how much work each attorney performed on the case.
Fighting for Accident Victims
For more than 40 years, Kuvara Law Firm has advocated for accident victims throughout Northern California. We understand that after an accident, most people don’t have money in their budget to pay for a lawyer. That is why we offer contingency fee agreements for all personal injury cases.
If you have been hurt in any type of accident, we are here to help. To learn more or to schedule a free initial consultation with a San Rafael personal injury lawyer, contact our law office at 415-479-7070, or fill out our online contact form.