What is a Contingency Fee in a Personal Injury Case?

 
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Posted on: 9/30/2019

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What is a Contingency Fee in a Personal Injury Case?
Written By: Josh Lowell ~ 9/23/2019

BLOGPOST_ContingencyFees09232019.JPGBeing injured in a motor vehicle accident is stressful enough, having to worry about out-of-pocket costs to pay for an attorney is an additional burden that would deter victims of auto negligence from seeking the compensation that they deserve. Many areas of law require lawyers to charge an hourly rate for their time, and most attorneys will require a retainer, which acts as a refundable deposit in order to being representing the potential client. Personal injury attorneys are different. In order to lower the burden of entry to those injured in a car accident, they developed a distinctive fee structure: the contingency fee.

Attorney commercials on daytime television make contingency fees sound exciting and unusual. In most cases, a confident and suavely dressed lawyer declares that “We don’t get paid, unless you win!” This is nothing special, however. This is just how the system works in the industry. A contingency fee does exactly what it states, it creates a fee structure that is contingent on a specific condition. In the case of injury claims after an auto accident, that condition is settlement with the insurance company or a judgment in court.

There are (at least!) four benefits to using contingency fees in personal injury cases.

Merged Interests
First, contingency fee agreements incentivize the attorney to put their client’s best interests at heart because their interests are always aligned. The higher the settlement achieved; the more net compensation the client will receive as the fee increases simultaneously. In doing so, it avoids situations where lawyers may make business decisions to perhaps settle or delaying cases in circumstances that only benefit their time and effort.

Limiting Out-of-Pocket Expenses
Next, contingency fees allow more than the wealthiest of clients to seek compensation after a vehicle collision. By removing the upfront cost of a trust retainer, all injured parties will have an opportunity to work with a qualified lawyer. Whereas, with a flat fee or an hourly retainer agreement, the client will likely be out of pocket a substantial sum as they walk in the door.

Reduces Frivolous Cases
Since attorneys only get paid in these situations if their legal endeavors are successful, they must make wise choices regarding which cases they will take on. In other words, a qualified and competent lawyer will avoid taking on cases they deem frivolous since the likelihood of a successful outcome is severely limited. This creates a sense of hope and optimism in clients because – if an attorney is willing to take on your case – you should know that your attorney is willing to stake their time, money, and effort working towards a great result.

Reduced Risk
Finally, in the unfortunate event that your case doesn’t turn out as expected, you will not be responsible for any fee owed to the lawyer since the attorney only gets paid if the settlement or judgment condition is met. This reduction in risk on the client allows injured parties to seek justice without the fear of substantial financial loss if things go sideways.

Contingency fees get a bad wrap because – in their minds – people see the stereotypical (and mostly factually inaccurate) image of an ambulance chasing lawyer taking advantage of an injured person in their time and need. This couldn’t be farther from the truth. Most attorneys – especially small practice and local ones – truly care for their clients and will go above and beyond where possible to protect their clients’ interests.

If you are injured because of the negligence of another person, don’t let the thought of costs deter you from speaking with an attorney. At Magnuson Lowell PS, our experienced attorneys provide free consultations regarding personal injury claims. Call today to learn about your rights and responsibilities after an accident from an experienced and diligent litigator.


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