What is a Personal Injury Contingency Fee Agreement?
In most instances, personal injury attorneys handle your personal injury case on a contingency fee basis. The attorney receives a percentage of the money you recover as your attorney’s fee from your personal injury case. As a personal injury client, you are not asked to pay any attorney fees as the case progresses and if, for any reason, you do not recover any damages you do not owe the attorney any money for your representation. This creates an incentive for the attorney to seek and recover as much money in your case as possible for you while limiting your attorney fee cost to the percentage of recovery that you and the attorney agree upon at the commencement of representation.
How Are Personal Injury Cases’ Expenses Paid In A Contingency Fee Agreement?
In most personal injury contingency fee agreements, the attorney will also agree to advance the expenses of the case effectively giving you a loan so that you have no out of pocket costs in the litigation. The expenses are paid back to the attorney when money is recovered for your damages. At Wischmeyer Law, if you were to lose your case then the expenses would be a loss to me. You would still not owe me any money. The only exception to that would be if I obtain an offer that I recommend you accept and you choose not to accept the offer then I may, depending on the circumstances, ask that you share expenses moving forward from that point and share in the risk of a trial scenario.
How Are Personal Injury Cases’ Subrogation Liens Paid In A Contingency Fee Agreement?
A subrogation lien is repayment of money that was paid on your behalf. One example would be if you have medical insurance that paid all or part of your medical bills that resulted from your personal injury. A second example might be a medical provider that agrees you do not have to pay for your treatment until after your case is over. This money is paid from the proceeds of your damages recovery directly by your attorney.
Example Simple Distribution Sheet For Personal Injury Contingency Fee Settlement:
Gross Recovery: $100,000.00 Less
35% Attorney Fee: $ 35,000.00 Less
Costs Advanced by Attorney: $ 2,500.00 Less
Subrogation Lien to Insurance: $ 20,000.00 Equals
Net Recovery to Client: $ 42,500.00
Not representative of any specific case or fee agreement…just an example using random numbers to provide additional information.