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What Are Contingency Fees?

Have you ever wondered what are the differences between criminal attorneys and personal injury lawyers? Well, it all lies in what we call contingency fees. While criminal lawyers charge a standard fee per hour, those that handle cases involving issues such as personal injury get a percentage of the settlement fee for a case.

Contingency arrangement cases involve a contingent fee, which is a form of legal agreement between the client and the lawyer to provide assurance to the client that they do not have to pay for any costs incurred throughout the legal claim process. Hence, any hefty charges would not be burdened on them, and they can be safely assured and more confident to make their case.

Want to know more about what contingency fees entail? Well, read on to find out more!

How Your Legal Fees Are Paid

As mentioned earlier, the contingency fee provides clients with the reassurance of incurring no additional charges if the case fails to be resolved. So, who would then pay the fees? Well, the costs will then fall on the lawyer.

If the case is concluded with a settlement, the claimant’s lawyer will then take a specified portion of the amount paid by the defendant, and this is how the personal injury lawyer will be able to profit from the case.

What If the Case Goes to Trial?

We talked about the case of the defendant settling, with a stipulated agreed amount with the client, but what if a settlement cannot be reached? Well then, the personal injury lawyer will then take this case to court and act as a representative for their client. After the case has been concluded and if the jury decides with a verdict that is in favour of the client, the contingency fee will then be distributed to the lawyer who has represented the client.

However, if the decision is being ruled in the defendant’s favour, as agreed in the contingency fee, the client will not have to pay for any fees incurred by the trial. Instead, the client’s lawyer will be responsible for any legal fees incurred during the entire process of the trial. 

So, what are the various cases where contingency fees are used? Well, civil cases, with examples like malpractices in medical care, dealing with abuse in nursing homes, disputes over workers’ compensation, car accidents, harm caused by medication, defects in products, and wrongful death. Do take note that contingency fees cannot be utilised during cases involving crime or family law.

An Incentive to Negotiate the Best Settlement

So, why are contingency fees used? Well, a stipulated fee definitely provides strong motivation and incentive for the personal injury lawyer to ensure they represent their client to the best of their abilities so that they are able to get this contingency fee. Knowing they might not be able to get paid anything if they lose arguably is the best incentive.

On the other hand, this benefits the client as well, as they no longer have to worry about the costs incurred during the entire process of building the case. Not worrying about any additional fees they are unaware of can provide a great form of security for the client.

Lastly, the law firm in charge of representing the client also no longer has to worry about the client not being able to afford or pay for the trial costs as an agreement has already been signed.

A Contingency Fee Basis Means No Money Upfront

When the client is made aware of the entire cost structure in the trial, this transparency definitely helps to alleviate any potential miscommunications and hiccups during the process. At the same time, for clients who may have certain financial issues, this contingency fee agreement may be a more affordable option for them.

However, for cases where contingency fees cannot be used, the lawyer will then be paid by the hour, and there will be an additional fee incurred, which is also known as the retainer fee, which is the initial startup fee before they proceed with the case.

This upfront retainer fee can present as a disservice to the client, as once the case proceeds, and the additional per hour costs start to pile up, if the client is unable to afford the additional costs incurred by the case, the law firm can simply stop serving the client.

Pay Attorney’s Fees From the Settlement.

A contingency fee, also means that the lawyer will be able to provide an evaluation of the case at no costs, which can typically be expensive, and many clients are unable to fork up fees just to determine if their case is worth bringing up at all. Hence with this consultation service, it benefits both parties.

Contingency Fee Agreements

After the first evaluation of the case with the personal injury lawyer, the contingency fee agreement is signed, which will also include all the costs, from the representation, counselling and any other services. During most situations, the client will not pay any initial fees.

Here are some things that the personal injury lawyer may include in the agreement. Firstly, the certified record expenses which the lawyer will have to cover. Next, expert analysis and evaluation of the case before it goes to trial. Lastly, the court fees incurred if the case has to be brought to court and cannot be settled outside.

How Much is the Contingent Fee?

So, what determines the contingent fee? Well, a few components will include: the amount of time and legal work that is needed to build this case and also to ensure it wins in the client’s favour during the trial. An easy way to minimise the duration to win a case would be to provide strong evidence such as medical and legal documents to support the case.

However, when there is ambiguity and a limited amount of strong evidence, a higher contingent fee percentage may result. For the most part, cases that reach settlements and do not go to trial are typically the most cost-efficient. But, if the case does go to court, a lot of additional time and preparation would then be required, and this can also show in the fees.

Contingency Fee Agreements Can be Different If Your Case Goes to Trial

So, what happens when the case goes to trial? Well, usually a higher percentage would likely be incurred. Typically, the percentage of a case going to trial would cost around 5 to 10 per cent more as compared to a case that reaches settlement. This additional percentage would cover the additional amount of time spent to prepare for the case to be presented to the court, which can span up to over additional hundreds of hours.


In all, court fees have to be handled very transparently by the lawyer, which will stipulate all the fees incurred, such as paying for witnesses and the process of obtaining any medical records. These fees should be discussed fully in the agreement, and you should discuss them with your lawyer before going through with it.

So, when the case has been successful or reaches a settlement, the percentage will automatically be paid out to the lawyer, hence making it overall a hassle-free process. Also know about What To Do When Hunter Warfield Is Worsening Your Debt Problem.

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