What is a Contingency Fee?
Posted on May 25, 2022 in Personal Injury
If you sustain an injury caused by the negligent actions of another individual or entity, you may need to file a personal injury lawsuit to recover compensation. However, these cases can be challenging, and an attorney is the best way to ensure that your case is successful. But what about affording an attorney? Can you even do this?
The good news is that most Portland personal injury lawyers will handle claims on a contingency fee basis. Here, we want to describe what a contingency fee is and explain how this helps make legal actions affordable for everyone.
Why a Contingency Fee is Necessary
The reality is that most individuals do not have the money to bankroll an entire personal injury case. Unfortunately, filing a civil personal injury lawsuit against an at-fault party can be incredibly expensive, sometimes reaching into the hundreds of thousands of dollars. There are so many expenses involved in a successful claim, including filing fees, paying expert witnesses, investigating the entire incident, and the attorney’s fees.
In order to help individuals successfully file a lawsuit against at-fault parties and insurance carriers, most personal injury lawyers will take claims on a contingency fee basis. This means that the attorney will recover their fees contingent on the claim being successful. If an attorney is not successful with the case, the personal injury victim will not have to pay any legal fees at all.
How a Contingency Fee Works
When a personal injury victim and an attorney agree to work on a case together, the official contingency fee arrangement will need to be discussed before commencing the process. Typically, a contingency fee arrangement revolves around the attorney receiving a set percentage of the final settlement or jury verdict amount. Usually, this percentage will range anywhere from 25% to 35%, often falling somewhere in between.
In order to show how this may work in a real-life scenario, let us suppose that a spinal cord injury victim comes to an attorney for help after a commercial truck accident. If the attorney agrees to take the case on a 33% contingency fee arrangement, then they will handle all of the up-front and out-of-pocket costs related to the case. Let us suppose, in this scenario, that the attorney recovers $1,000,000 on behalf of their client. In this situation, the attorney would receive $330,000, and the client would receive $670,000.
This may seem like a large amount of money for an attorney to earn, and we understand that. However, because the attorney fronted all of the money for the case and because they took the risk of not winning the case in the first place, this type of contingency fee is typically accepted. Additionally, individuals who work with an attorney for their claim are much more likely to recover higher amounts of compensation than they would otherwise have received if they handled the claim without a lawyer.
When an injury victim works with an attorney, the attorney is the one to handle every aspect of the claim. The injury victim’s sole responsibility is recovering from their injuries, not handling insurance carriers or legal teams from the other party.