How do contingency fees work in personal injury cases?

Contingency fees are a common payment structure used by personal injury attorneys, designed to provide access to legal representation for clients who may not have the financial means to pay upfront legal fees. With a contingency fee arrangement, your lawyer agrees to represent you without charging any initial fees. Instead, their payment comes as a percentage of the compensation you receive if your case is successful. Here’s a breakdown of how contingency fees work and their benefits:

1. Payment Only Upon Success

In a contingency fee agreement, the attorney’s fee is contingent on winning the case. If the lawyer does not secure a settlement or verdict in your favor, you do not owe them for their services. This structure aligns the lawyer’s interests with yours, as they are motivated to secure the highest possible compensation for you.

2. Typical Contingency Fee Percentages

The percentage a lawyer takes as their fee typically ranges from 33.3% to 45%, depending on factors like:

  • The complexity of the case: More complex cases may warrant a higher fee.
  • The stage at which the case is resolved: A case settled early may incur a lower percentage than one that goes to trial.

For example, if your settlement is $100,000 and your lawyer’s contingency fee is 33%, they would receive $33,000, leaving you with $67,000.

3. Additional Costs and Expenses

In most cases, attorneys will also incur expenses while handling your case, such as:

  • Filing fees.
  • Costs for obtaining medical records.
  • Fees for expert witnesses.
  • Travel expenses for depositions or court appearances.

Typically, costs incurred on behalf of the client are separate from the attorney fees and need to be reimbursed regardless of the outcome.  Oregon law prohibits attorneys from loaning money to clients. It’s important to clarify how these expenses will be handled in your agreement.

4. Benefits of Contingency Fees

  • No Upfront Costs: You can hire a skilled attorney without paying anything out of pocket.
  • Access to Justice: This payment structure makes legal representation accessible to those who might not otherwise afford it.
  • Motivation for Your Lawyer: Because the attorney’s fee depends on the outcome, they are incentivized to work diligently on your behalf.
  • Risk-Free for Clients: If the case is unsuccessful, you typically owe nothing.

5. Questions to Ask About Contingency Fees

Before signing a contingency fee agreement, ask your attorney the following:

  • What percentage will you take, and will it increase if the case goes to trial?
  • How will additional costs and expenses be handled?
  • Are there any circumstances under which I would owe money if we lose?

Understanding these details ensures there are no surprises and that you’re comfortable with the terms of the agreement.

6. Why Contingency Fees Are Ideal for Personal Injury Cases

Personal injury cases often involve clients who are facing financial strain due to medical bills, lost wages, and other expenses related to their injuries. Contingency fees enable clients to secure high-quality legal representation without adding to their financial burdens. Moreover, attorneys who work on a contingency basis have a vested interest in winning your case, which can provide peace of mind.

In conclusion, contingency fees make legal representation accessible, remove the risk of upfront costs, and align the attorney’s incentives with your interests. Always ensure you fully understand the terms of your agreement before proceeding with your case.