How Can I Afford to Pay for Personal Injury Litigation?

Litigation and attorneys' fees can be expensive. Some people think that they cannot afford to hire a personal injury attorney because it costs too much. However, few personal injury attorneys charge an hourly rate. Instead, most cases are taken on a contingency fee basis. This means that no charge is made unless and until damages are recovered from the party at fault.

Contingency fees mean that anyone with a valid legal claim can afford legal representation, not only those who are wealthy enough to afford to pay out of pocket. This is especially important in personal injury cases because an injured person often lacks the financial ability to finance a lawsuit, and the sustained injuries frequently mean that the victim is unable to work.

In a contingency fee arrangement, the attorney does all the work before being paid. Then, in accordance with the contingency fee agreement, the attorney is paid a percentage of either the gross or the net recovery. For example, if an injured person recovers $100,000 in damages and the contingency fee is 30 percent, the attorney will be owed $30,000. The victim does not need to worry about paying legal fees during the pendency of the claim, and if he or she loses, no contingency fee is owed.

The specifics of the fee arrangement will depend on the case, and several variations to the traditional contingency fee may be used. An attorney may increase the percentage charged as the case goes further through the legal process. For example, a lower fee may be charged if the case is settled instead of going to court. Another variation is employing a sliding scale in which the percentage is based on whether the damages meet specified threshholds. For example, an attorney may charge 30 percent for the first $500,000 in damages, 20 percent for the next $500,000, and 10 percent for anything above that amount.

California law provides that contingency fees are negotiable, and that an attorney must inform the client in writing of this fact. The attorney and client must sign a contract including this statement and other provisions, including the contingency fee rate and how costs will affect the client’s recovery.

It is important to distinguish an attorney’s fee from litigation costs. Litigation costs are the costs of the claim, and include such things as filing fees, investigative fees, deposition fees, expert witness fees, travel, or copying documents. An attorney often will advance those costs to the client and be reimbursed from the recovery.