What are they, how do they work, and what are your rights?
If you’ve ever seen or heard even a single commercial for a personal injury attorney, you have probably heard the common mantra, “no win, no fee,” or “we don’t win, you don’t pay.” This common slogan is used to represent the attorney’s contingency fee arrangement. If you hear these types of words repeated in an advertisement, it’s not because the lawyer is offering a great deal or promotion; in fact, virtually all Florida personal injury lawyers operate using a contingency fee arrangement.
In this type of arrangement, the client pays nothing up front, and the lawyer only collects his or her fees from the settlement or verdict awarded in the client’s case. Florida personal injury lawyers typically collect 1/3 of the amount won in the case, and some attorneys may tack on additional amounts to cover their legal expenses. For consumers considering hiring an attorney on a contingency fee basis, it’s important to understand the full implications of this model, including what are their rights and how to protect them. To help in fully understanding this, it’s beneficial to know more about what contingency fees are, exactly; why we have them; and why they are good for the public when exercised ethically and responsibly.
Excessive Contingency Fees May Surprise You
When you sign a contingency fee agreement with a personal injury attorney, it may be easy to see and understand that 33% of your case’s verdict or settlement award will go to your lawyer. That’s a palatable figure, considering the extent of the amount of work that can go into litigation. What might not be so clear, however, is in the fine print that follows. Under Florida law, attorneys are able to take higher percentages of your case’s settlement or verdict to cover their legal expenses. These expenses may include things like:
- production of medical records;
- production of police reports;
- expert witness fees;
- postage fees;
- court filing fees;
- hiring investigators;
- taking depositions; and
- creating trial exhibits
The closer a case gets to trial, the more these expenses will continue to add up. In a case that is particularly complex, the fees can grow to a staggering amount. Not all attorneys will deduct these costs from your settlement, but be sure to understand
Contingency Fees Are Good Public Policy
Contingency fees are good for the public for many reasons, but primarily because it helps to protect the rights of consumers by providing the ability to retain competent legal representation, regardless of an individual’s finances or ability to pay expensive attorney fees. If contingency fee arrangements weren’t available, only the wealthy and well-to-do could afford to hire a lawyer; and unfortunately, the legal expertise of an attorney is often required to effectively navigate the legal process and attain a satisfactory result. Contingency fees levels the playing field, enabling victims of injury and neglect seek, and gain, compensation for their losses, no matter how well-funded the defendant’s team of attorneys may be.
While contingency fees do a lot of public good, the flip side is that they can allow for some situations in which clients may be taken advantage of or exploited by unethical lawyers. For instance, a client might require 100% of a verdict to make them “whole;” but the client wouldn’t know until they received the check from their lawyer that nearly 60% of the verdict amount was deducted to cover the attorney’s fees. This is why it’s important to know what your rights are and how to protect them before entering into a contingency fee agreement with a lawyer.
What are your rights under a contingency fee arrangement?
The Florida Bar Association published the Statement of Clients’ Rights in Contingency Fee Cases to ensure that clients understand their rights and are able to protect themselves from lawyers and attorneys that fall short of the State’s strict code of ethics. This statement of rights was approved by the Florida Supreme Court in 1986 and contains a lot of critical information that anyone who is hiring a personal injury lawyer should know.
It’s well advised that all individuals read in full the Statement of Clients’ Rights in Contingency Fee cases before hiring a personal injury lawyer. But for the here and now, just consider the first two of the eleven points, which are particularly important:
1. There is no legal requirement that a lawyer charge a client a set fee or a percentage of money recovered in a case. You, the client, have the right to talk with your lawyer about the proposed fee and to bargain about the rate or percentage as in any other contract. If you do not reach an agreement with one lawyer you may talk with other lawyers.
You DO NOT have to agree to give your injury attorney 33% of your case’s verdict or settlement. It’s huge to understand that you do have the power of negotiation in contracting your lawyer. Take advantage of it.
2. Any contingent fee contract must be in writing and you have three (3) business days to reconsider the contract. You may cancel the contract without any reason if you notify your lawyer in writing within three (3) business days of signing the contract. If you withdraw from the contract within the first three (3) business days, you do not owe the lawyer a fee although you may be responsible for the lawyer’s actual costs during that time. If your lawyer begins to represent you, your lawyer may not withdraw from the case without giving you notice, delivering necessary papers to you, and allowing you time to employ another lawyer. Often, your lawyer must obtain court approval before withdrawing from a case. If you discharge your lawyer without good cause after the three-day period, you may have to pay a fee for work the lawyer has done.
If you hastily rush into a retainment agreement with your injury attorney and subsequently get cold feet, it’s important to know that you do have a period of three business days to back out of the contract.
What if there is a dispute between you and your lawyer?
Typically, when a settlement or verdict is awarded for your case, the check payment will be delivered directly to your lawyer. Once your lawyer receives the check, they will deduct their contingency fee, along with any additional, stipulated for, legal expenses. If you receive a check and believe it is not for the full amount to which you are entitled, you can dispute the lawyer’s charges. If the amount is in dispute, the lawyer is supposed to deposit the amount in question into a trust account for safe keeping.
If you have any additional questions about hiring a personal injury or car accident attorney on a contingency fee basis, call Collingsworth Law at (321) 222-0234. We will be happy to assist you in understanding your agreement, even if it’s with another attorney.