Traditionally, legal representation follows a straightforward model: you pay your lawyer an hourly rate for their time and expertise. This can be a challenge for accident victims, especially those who are already struggling due to their inability to work as a result of the accident.
If you belong to this category, contingency fees allow you to pursue compensation for your injuries without having to pay your lawyer upfront.
The lawyer agrees to take your case on a contingency basis, meaning their fee is contingent on winning your case or securing a settlement.
How Contingency Fees Work
Contingency fees typically range between 33% and 40% of the total compensation you receive from the at-fault party’s insurance company. The exact percentage can vary depending on several factors.
More complex cases involving severe injuries, disputed liability, or extensive litigation might command a slightly higher contingency fee due to the increased time and resources invested by the lawyer.
Also, the lawyer’s experience might be a deciding factor in the structure of their contingency plan.
Highly experienced lawyers with a proven track record of success in car accident cases might charge a slightly higher contingency fee to reflect their expertise and ability to secure a favorable outcome.
Contingency fees can also vary depending on your geographic location. You should consult with several lawyers in your area to get a sense of the prevailing contingency fee rates.
What’s Covered Under a Contingency Fee Agreement?
The specific details of a contingency fee agreement can vary depending on the lawyer and the nature of your case.
However, a typical agreement will cover the lawyer’s percentage of the recovered amount.
It also typically covers all case-related expenses which might include filing fees, court costs, expert witness testimony, and investigation costs.
Some agreements stipulate that these expenses are deducted from the final settlement before the lawyer’s fee is calculated, while others might require you to reimburse the lawyer for these expenses if the case is lost.
Benefits of Contingency Fees
Here are the top benefits of a contingency plan:
Access to Justice
Contingency fees allow everyone, regardless of their financial situation, to access quality legal representation. This ensures that even those facing financial hardship can pursue fair compensation for their injuries.
Stronger Case Preparation
Lawyers working on contingency have a strong incentive to build a compelling case for you.
They invest their time and resources into thorough investigation, evidence gathering, and negotiation strategies to maximize your potential compensation.
Alignment of Interests
With a contingency fee arrangement, your interests and your lawyer’s interests are perfectly aligned.
Both of you want the best possible outcome for your case, and this tends to foster a more collaborative and committed approach.
Regular Updates
Your lawyer should keep you informed about the progress of your case, answer your questions promptly, and address any concerns you might have.
Transparency in Negotiations
You’ll typically be involved in settlement discussions. Your lawyer should explain different options and get your input before accepting any offer from the insurance company.
Shared Decision-Making
Ultimately, the decision to accept a settlement or go to trial rests with you. But, your lawyer will provide you with the information and guidance
What You Should Consider Before Signing a Contingency Contract
Before entering a contingency fee agreement with any lawyer at all, here are the things you have to understand:
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The percentage
Make sure that you clearly understand the percentage of your compensation that will go towards the lawyer’s fee.
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Other costs
While the lawyer’s main fee is contingent on winning, there might be other associated costs, such as filing fees, court costs, or expert witness fees.
Discuss these potential costs with your lawyer upfront and understand who is responsible for them.
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The agreement terms
Read the contingency fee agreement carefully and ask your lawyer to explain any clauses you don’t understand. The agreement should clearly outline the lawyer’s responsibilities, your responsibilities, and the fee structure in detail.
