Win-Win Situations:  Contingent Fee Representation

Representation for insurance bad faith, consumer fraud or abuse, personal injury, and wrongful death lawsuits is too expensive for most to secure with their personal fiances.  That’s why plaintiffs’ lawyers and law firms, including Skinner Law Firm, often work on a contingent fee basis instead of charging their clients by the hour for consumer protection and tort cases.

Under a contingent fee agreement, a lawyer asks for no upfront money in order to work on a case.  Instead, the lawyer is paid a portion of any money recovered when a case is settled, or when a judgment is paid after a verdict is entered by the court.  If no recovery is made for the client, the attorney receives no payment.  This means that the work the lawyer has committed, the payment of court costs and filing fees, the costs of deposing witnesses, the expense of hiring experts, and the cost of obtaining materials necessary to research and develop the case, are not recovered by the lawyer unless the client recovers monetary damages.  In other words, the lawyer bears much of the financial risk of losing a lawsuit.

Skinner Law Firm is willing to incur these risks for our clients’ cases because we are committed to the principle that access to justice should be available to all individuals and families regardless of ability to afford a lawyer.  No legitimate legal dispute should be denied access to the courts because of an individual’s inability to pay court costs or attorney’s fees.

Entering into a contingent fee agreement is a good investment for Skinner Law Firm.  We take cases that we believe have merit and can win for our clients.  Even though recovery of monetary damages is by no means a sure thing, we have confidence that we are more likely than not going to recover for our clients’ physical and/or financial injuries.

You may have seen lobbying groups complain about numerous frivolous lawsuits and the need for tort or legal reform. However, you should be wary of such complaints. Plaintiffs’ lawyers work very hard to weed out frivolous cases. A plaintiff’s lawyer, retained under a contingency fee agreement, does not get paid unless the lawyer can show that the defendant is at fault, that all of the plaintiff’s damages were caused by the defendant, prove the monetary value of the damages, and have the defendant held liable for the damages to the plaintiff caused by the defendant’s actions or omissions.

The portion of pay received from a recovery depends on the type of case, and the stage of litigation a case reaches. For a typical personal injury case – for example, an automobile wreck – Skinner Law Firm’s standard contingent fee agreement states that the lawyer will be paid 33 and 1/3% of all money recovered up to thirty days before trial, or 40% of all money recovered from that point until a verdict is issued by the court.  The lawyer’s fee is deducted from the recovery, and then the firm’s costs are deducted.

Contingent fee agreements help people, from all income levels, who have been injured by another’s wrongdoing or mistake, get access to justice.  Without contingent fee agreements, courtrooms might only be available to individuals or companies able to pay for their attorney and costs out of pocket.

If you have been defrauded, injured, or lost a loved one because of another’s wrongdoing, then contact us at Skinner Law Firm for a free consultation.  Our lawyers will examine your case and see if we can help.

Standard Contingent Fee Examples for a Car Wreck

Consider this case settlement example.  Skinner Law Firm agrees to represent Paula, who was seriously injured in an automobile wreck, when her car was struck by the Defendant’s car.  Six months before trial, Defendant’s insurance company and our client, Paula, agree to a settlement of $60,000 for her damages.  At this point, the lawyer has mainly performed pre-trial litigation work and the firm has only paid $3,000 in litigation fees/costs. Here would be the breakdown under the typical contingent fee agreement:

$60,000    Total Recovery

-$20,000    Contingency Fee to Attorney (33 and 1/3%)

-$3,000      Costs paid by Law Firm

=$37,000   Client’s Recovery (less any medical liens)

When any medical bills from the wreck have been covered, it is likely the client will not directly receive the full $37,000.  The client’s health insurance company or Medicare/Medicaid would have a lien on the client’s recovery for the covered medical bills from the wreck.  If the client’s health insurance incurred $7,000 in medical bills resulting from the injuries sustained in the wreck, then the client’s recovery may be reduced by that amount.  If so, the client would recover $30,000.

Alternatively, if the case went to trial, the numbers would be different.  The lawyer would earn a higher fee for the trial work, and the firm’s costs would be higher.  However, the jury award might be higher than the settlement award.  Consider this trial example.  If the jury awarded our client damages in the amount of $100,000, then the breakdown would look like this:

$100,000   Total Recovery

-$40,000    Contingency Fee to Attorney (40%)

-$8,000      Costs paid by Law Firm

=$52,000   Client’s Recovery (less any medical liens)

However, if the case goes to trial and results in a verdict for the defendant, meaning no recovery for our client, then the lawyer’s contingency fee would be zero, and Skinner Law Firm would not recover the $8,000 in costs/fees it paid.

If you would like to discuss the possibility of contingent fee representation with Skinner Law Firm, please do not let financial concerns keep you from contacting us.  Contact us at Skinner Law Firm for a free consultation.  Our lawyers will examine your case and see if we can help.