If you’re involved in an accident and sustain damages, recovering compensation may be a top priority. This can be especially true when you’re not responsible for the accident. Instead, it’s caused by someone’s reckless or negligent actions. Unfortunately, filing a personal injury claim with the at-fault party’s insurance company isn’t always easy.
To receive adequate compensation, you often need legal representation. However, attorneys charge fees for their services and you may not be able to afford hourly rates or upfront costs but there is another option. Understanding the advantages of contingency fees can help ensure you can afford an attorney regardless of your ability to pay.
What Are The Advantages of Contingency Fees?
If you’re not sure what contingency fees are, the explanation is fairly simple. You enter into an agreement with an attorney with the expectation of only paying for legal services once your personal injury claim is successfully settled. The agreement must be in writing and signed by both parties for it to be legally binding. After settling your injury claim, an agreed-upon portion goes to your attorney to pay for their legal services.
How much of your settlement goes to your attorney depends on the terms of your contingency fee agreement. Most personal injury attorneys charge between 30% to 40% of a personal injury settlement award. Your settlement check from the insurance company goes into an escrow account. During your final meeting with your attorney, their fees are deducted and you receive a check for the rest.
So, if your contingency fees are 35% of a $100,000 settlement. You receive $65,000 after paying your attorney fees.
An obvious advantage of contingency fees is you can retain legal representation without worrying about coming up with hourly or upfront payments. For accident victims, this is often the only way they can afford to hire an attorney.
They’re already dealing with unexpected expenses relating to the accident, which also means you don’t need to spend hours trying to figure out how you can afford the costs associated with your personal injury claim. Most contingency fee agreements cover all or most costs associated with successfully litigating an injury and accident claim.
To help better guide and inform you, here’s a closer look at some of the other advantages of contingency fees.
Your Attorney is Motivated
Most attorneys are motivated to produce successful outcomes for their clients. When attorneys lose too many cases their business often takes a hit. After all, most people are going to choose an attorney with a winning case record or one that constantly loses.
With that being said, contingency fees can provide a little extra motivation for an attorney to win a personal injury claim. Remember, with a contingency fee agreement, the lawyer is only paid for their work if they win your claim.
Almost No Financial Risk for the Client
Since you’re not paying an hourly rate or shelling out money upfront, you have very little to lose with contingency fees. Yes, you may end up owing filing costs and fees to obtain copies of documents like medical records and accident reports. However, these expenses are minimal compared to what it costs to hire a lawyer.
Your biggest risk with contingency fees is not being able to successfully settle your personal injury claim. All you’re out is your time, instead of money.
A good tip to remember is to hang on to your copy of the contingency fee agreement. Most attorneys will adhere to the agreement but some may try to sneak in an added fee if you lose your accident case. Don’t forget to have your attorney sign the agreement.
A contingency fee agreement is only legal if it’s signed by the attorney and client. If the agreement isn’t signed, your attorney may be able to charge fees for their services.
Types of Compensation an Attorney Can Recover
Simply because an attorney is working on a contingency fee basis doesn’t mean you’re limited on the types of damages you can list in a personal injury claim. Contingency fees only affect when your lawyer is paid. The agreement doesn’t impact the type of compensation you can recover.
You can list all of your economic and non-economic damages in your accident claim. Some examples can include:
- Medical expenses: If your injuries require rehabilitation, long-term, or a lifetime of care, you can also list these expenses.
- Loss of income: Some injuries are severe enough to force you to miss work. You may not be able to return to your previous position or even go back to work. You can often recover compensation for lost wages, including any future income.
- Property damage: Your repairs and/or replacements are typically covered by the at-fault party’s insurance.
These are examples of common economic damages. Your personal injury claim can also list non-economic damages like pain, suffering, mental anguish, emotional distress, and loss of life enjoyment to name a few.
While you may think you can handle calculating your economic damages, non-economic losses are a little different. These are intangible damages, making them a little harder to value. However, your attorney can help you come up with a number, which can be another time when contingency fees have a slight advantage.
Since your attorney is working for a percentage of your compensation, they’re often motivated to place a high value on your non-economic damages. This doesn’t guarantee the insurance company will settle for that amount—however, it does start the negotiations at a higher number which can translate into a larger settlement.
What you don’t want to do is start listing a host of non-economic damages. You’re still required to show proof and you don’t want to be hit with a potential insurance fraud charge. Only list damages you can prove to avoid any legal issues.
Contingency Fees Have Advantages In Personal Injury Claims
Retaining an attorney can be costly, even if you only require help with calculating non-economic damages and negotiating with insurance companies.
Despite this, contingency fees offer a viable solution, making legal representation accessible to all accident victims. This arrangement allows individuals to afford the necessary legal support, with payment contingent on winning the case, ensuring that financial constraints do not hinder the pursuit of justice.
