Explanation & Overview
Personal injury claims including automobile accidents are usually handled by lawyers on a contingency fee basis instead of an hourly fee. You only pay your attorney a fee if your claim is settled or litigated successfully. If there’s no recovery you pay no attorney fees, but you may be responsible for costs. As your personal injury attorney in Orange County, it is always our firm’s goal to produce the best result for our clients. We will work hard, to the best of our ability, to ensure that you receive a fair settlement or judgment in your favor.
How Does a Contingency Fee Based Case Work?
In California a valid contingency fee agreement requires an express contract governed by Business and Professions Code Section 6147. In addition to the same requirements as a Non-Contingent fee agreement, the following additional requirements apply:
- A statement of the contingency fee percentage amount.
- A statement as to how disbursements and costs will affect the contingency fee and the client’s recovery.
- A statement as to what extent, if any, the client could be required to pay any compensation to the attorney for related matters that arise out of their relationship not covered by their contingency fee agreement. This may include any amounts collected for the client by the attorney.
- Unless the claim is subject to the provisions of Business and Professions Code Section 6146 (Claim Against Health Care Provider) a statement that the fee is not set by law but is negotiable between the attorney and client.
When an injury victim hires an attorney on a contingency fee, they pay no money out-of-pocket. Instead, the client agrees to pay the attorney a percentage of the recovery. Typically a contingency fee in California is 33 1/3% of the gross recovery and increases if a lawsuit is required due to the additional time and effort involved. Cases involving minors are typically handled for a lesser contingency fee.
What are the Pros and Cons of a Contingency Fee Based Case?
Contingency fee agreements are valid only in civil cases and are most frequently used in personal injury cases. Contingent fees are never permitted in criminal cases or divorce proceedings. Due to the risk involved, not all attorneys will work on contingency fee cases. The main benefit of a contingency fee agreement is that the injured party can pursue their case without having to pay attorneys an up-front fee or pay an expensive hourly rate for every phone call or letter. A contingency fee allows an injured party to have a skilled attorney protecting their interests to recover damages against insurance companies. A disadvantage of contingency fee agreements is that attorneys shy away from injury cases they don’t feel they can win or where the amount of damages are too minimal to justify the work involved.
If you’ve been involved in an accident, we encourage you to contact an Orange County accident lawyer as soon as possible. At Kerr & Sheldon, we take all personal injury cases on a contingency fee basis. We don’t charge a fee until we’ve collected the compensation your claim deserves.