The fee arrangement for personal injury representation is distinct from other areas of law. The typical structure involves a contingency fee contract. A plaintiff does not owe any attorney’s fees or costs to the attorney unless he or she recovers in court. In that event, the attorney is awarded a percentage of the recovery.
Do Contingency Fees Get A Bad Rap?
You may wonder whether this approach is effective. In fact, contingency fee arrangements get a bad rap in other contexts. In criminal cases, for example, the ABA Model Rule of Professional Conduct states that contingency fee arrangements are unethical. In various case law, courts have explained that a criminal defendant’s right to effective counsel might be compromised if his or her attorney has a financial stake in the case.
When Are Contingency Fees Allowed?
Yet a personal injury lawsuit is a civil claim. Although an accident victim may have severe and catastrophic injuries, his or her personal liberty is not at stake. The victim is pursuing only a financial recovery against the defendant. Consequently, the contingency fee arrangement is permitted.
Encouraging A Strong Attorney-Client Connection
In fact, there are several benefits to this approach in personal injury lawsuits. First, the attorney is incentivized to maximize his or her client’s financial outcome. More importantly, an accident victim has a level playing field in finding effective legal representation. This is because the contingency percentage is often standard among personal injury attorneys, regardless of their years of experience. A new personal injury attorney essentially charges the same contingent rate as an attorney with over 20 years of experience.
Source: New York Law Journal, “Contingency Fee? When Hourly Fees Run too High in a Criminal Case,” Joel Cohen, Aug. 13, 2018