Contingency fee agreements are a popular type of legal fee arrangement used in many personal injury and civil litigation cases. Essentially, the client only pays the attorney a fee if the case is successful and the client receives a settlement or judgment award.
Here`s how it typically works:
1. The client and attorney agree on a percentage fee: In a contingency fee agreement, the attorney and client agree on a percentage of the final settlement or award that the attorney will receive as their fee. This percentage can vary depending on the complexity of the case, the likelihood of success, and other factors.
2. The attorney covers all upfront costs: In most contingency fee agreements, the attorney covers all upfront costs associated with the case, such as filing fees, expert witness fees, and other expenses. These costs are deducted from the final settlement or award before the attorney takes their percentage fee.
3. The client is responsible for certain costs: While the attorney covers most of the upfront costs, there are some expenses that the client may be responsible for, such as travel expenses for the attorney or other related costs. These will typically be outlined in the contingency fee agreement.
4. The attorney only gets paid if the case is successful: In a contingency fee agreement, the attorney only receives their fee if the case is successful and the client receives a settlement or judgment award. If the case is not successful, the attorney does not receive a fee and the client is not responsible for paying any costs.
There are some potential downsides to contingency fee agreements that clients should be aware of. For one, the percentage fee can sometimes be higher than what an attorney would charge under a different fee arrangement. Additionally, because the attorney is only paid if the case is successful, they may only take on cases they believe have a good chance of winning, which could limit a client`s options.
Overall, contingency fee agreements can be a good option for clients who cannot afford to pay an attorney upfront or who are hesitant to take on the financial risk of pursuing a case. If you`re considering a contingency fee agreement, make sure you understand all the terms and potential costs involved before signing on.