People are sometimes reluctant to seek legal advice from a personal injury lawyer after an accident. They believe they cannot afford legal fees and expenses, particularly if their injuries have caused them to be off work. In this situation, pursuing a legal claim can feel overwhelming. As a result, individuals may risk missing important deadlines for bringing a claim.
Contingency fee agreements
In most cases, however, an injured person who files a lawsuit against a negligent party (a “plaintiff”) does not pay anything up front or out-of-pocket. This is because most personal injury lawyers handle cases on a contingency fee basis, which is designed to make legal representation more accessible. The goal of contingency fees is to provide the public with access to a lawyer without the worry of up front legal fees and costs.[1]
What is a contingency fee?
A contingency fee means the lawyer is only paid if the case is successful. In other words, a lawyer’s fees are contingent or dependent on the lawyer getting compensation for the client. If the case is won, the lawyer usually collects a percentage of the client’s award as payment. If the lawyer is not successful, then the client does not have to pay any legal fees.
How legal fees are determined
Legal fees are typically calculated as a percentage of the compensation recovered and are set out at the beginning of the case in a contingency fee retainer agreement. This should be established at the beginning of a case through what is called a contingency fee retainer agreement.
The lawyer’s proposed fee may vary depending on a number of factors, including:
- the likelihood of success and strength of the claim;
- the complexity and legal issues involved in the claim;
- the level of risk, time, and resources required to pursue claim;
- the amount of the expected recovery;
- who is to receive an award of costs; and,
- the amount of costs awarded.[2]
Given that most personal injury lawyers only get paid if they are successful, they are usually very careful about the cases they accept. This helps ensure the case has a reasonable prospect of success. If a personal injury lawyer takes a case, it usually means that he or she believes there is a chance of success.
Option to pay on an hourly basis
It is important to note that a contingency fee arrangement is not the only option. Clients may also choose to pay legal fees on an hourly basis, depending on their preference and the agreement with their lawyer.
What happens if you change personal injury lawyers?
If a client decides to change lawyers in the middle of a case, most lawyers will charge for the time they put into the case. In most cases, the former lawyer and new lawyer will make an arrangement so that these fees will not be charged until the end of the case. This information should be described in the contingency fee retainer agreement to ensure clarity and fairness.
Case-related legal expenses or disbursements
In addition to legal fees, there are also case-related expenses known as disbursements. Most personal injury lawyers will also advance legal expenses or disbursements, rather than asking clients to pay up front. Some examples of legal expenses or disbursements include the following:
- court filing fees;
- the cost of hiring expert witnesses;
- the cost of developing courtroom presentations;
- investigators’ fees;
- photocopying and faxing;
- phone and mail charges; and,
- research costs.
Disbursements are necessary expenses incurred to move a case forward. If the case is successful, these costs are typically reimbursed from the settlement or judgment in addition to legal fees. The contingency fee retainer agreement should describe in detail when and how disbursements are to be paid by a client.
Legal fee contribution from the Defendant
If the case is successful, the unsuccessful party will usually be required to contribute to the plaintiff’s legal fees and disbursements. This will lessen what a client will be required to pay to the lawyer out of the funds received from a personal injury lawsuit.
The importance of reviewing the contingency fee retainer agreement
It is very important that clients understand how their lawyer is being paid from the beginning of the lawyer-client relationship. Lawyers should meet with new clients to review the contingency fee retainer agreement in detail and to answer any questions to ensure informed decision-making and transparency.
How Siskinds can help
At Siskinds, our team is committed to providing clear, accessible guidance on legal fees and the claims process so clients can make informed decisions with confidence. We take the time to explain contingency fee arrangements, disbursements, and all potential costs at the outset of a case, ensuring there are no surprises. Our lawyers carefully assess each case, explain available options, and provide ongoing support throughout the legal process.
If you have questions about contingency fees, insurance claims, or your potential personal injury case, please write to me at anna.stoll@siskinds.com or call 519-660-7832.