What are Contingency Fees?

By Jim Merritt, Attorney at Law

You may have heard others say their attorney handles cases on a contingency basis or charges contingency fees. What does this mean?

Attorneys charge an average hourly rate of $250 or more. When an individual who has been injured in an auto accident, personal injury or medical malpractice case hears this hourly rate, he (or she) will frequently assume that he simply cannot afford an attorney.  And, in fact, most could not afford such attorney fees in such cases.  For that reason, accident, personal injury and medical negligence attorneys typically will offer to handle these cases on a contingency basis.  This means that the attorney will not be paid for his time and effort until such time as a settlement is agreed upon or a judgment is won at trial and collected. The attorney fees (and often times the expenses related to the case as well) are deducted from the settlement amount. While the attorney may have to wait for months or even for years to be paid for his time, he will be paid once the case is won.  On the other hand, if the case is lost the attorney receives nothing for their time and effort invested in the case.

Contingency fees can be a “win-win” scenario, allowing the injured party to be represented by an attorney, which can not only improve the chances of obtaining a reasonable settlement or winning a judgment against the opposing party, but in many cases will result in a larger settlement than the individual might negotiate on their own. The attorney benefits, as well, being paid for time and effort once the case is won.

Contingency fees are almost always charged as a percentage of the recovery. This percentage varies by type of case. For example, experienced medical malpractice attorneys may charge from 40 to 50 percent of any recovery plus costs. While this may seem high, remember that many malpractice cases do not result in a verdict and in those cases the attorney receives no attorney fee for his months, perhaps years of effort and time. Auto accident contingency percentages are normally lower, usually in the 33-35% range.

For decades Merritt Webb has represented auto accident, truck accident and medical malpractice victims on a contingency basis. Contact us to learn more.

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