When you’re hurt in an accident, and it’s someone else’s fault, you may need representation from a personal injury lawyer.
There tends to be a misconception that you can’t afford a personal injury attorney. In reality, almost all personal injury lawyers work on what’s called a contingency fee agreement, which we talk about more below, but you still have to understand how costs and expenses fit into this.
What is a Contingency Fee?
Personal injury attorneys are unique in the fact that they work on a contingency fee. Other lawyers tend to be paid on a retainer basis or hourly. Some attorneys might also charge a flat fee.
A contingency fee is an alternative to these arrangements, and you don’t pay anything when you initially hire someone to represent you.
You instead pay a percentage of what you recover from your claim. You’ll agree with your attorney to a percentage when you sign their agreement.
If a personal injury attorney doesn’t recover compensation for your losses, then you don’t owe them money.
The more money a personal injury attorney recovers on your claim, the more they make, incentivizing them to take cases with merit and to do their best throughout your case and get you the highest possible settlement.
Most personal injury attorneys will charge a 33% contingency fee if the case settles and you don’t go to trial, which is almost always what happens. If your attorney has to file a lawsuit, the contingency fee will probably go up.
What About Expenses Throughout Your Case?
When a personal injury attorney takes on your case, usually, they’ll pay the costs and expenses upfront as they’re incurred. For example, these expenses might be administrative, like making copies and sending certified correspondence. They can also be the costs of hiring expert witnesses, deposition costs, the costs of gathering information and conducting investigations, and court costs.
Of these, the biggest expenses are going to relate to expert witnesses. Expert witnesses can charge hundreds of dollars an hour or more to review a case. In complex cases, expert witnesses can be tens of thousands of dollars.
Administrative expenses are postage, travel, copying, producing trial exhibits, and legal research.
If there’s not a lot of document-based evidence in your case, you won’t have to pay much.
Deposition costs are the costs of taking non-trial, sworn testimony on the record.
Investigation and information-gathering expenses may be minimal in simple cases, but if any special research is needed again, these costs can be high.
Costs aren’t something that you’re paying to a personal injury attorney as a fee for them. These are things that the office is paying through the course of investigating and negotiating your claim.
How Are These Costs and Expenses Paid?
The idea, in general, with personal injury, is that you are likely dealing with medical bills and maybe time off work because of your injury, so you don’t have the money to put toward your case.
With that in mind, you’re usually going to pay back the costs your lawyer incurs as part of your final settlement amount.
If you’re paying a contingency fee, the fee agreement has to clearly state whether the expenses and costs will be deducted from your final compensation before or after the attorney calculates their percentage fee.
If you have a lawyer with an agreement that states they’re going to first calculate the fee percentage and then deduct costs, then the fee the lawyer receives is larger, and you receive a smaller amount of compensation compared to a lawyer deducting their costs before calculating their percentage.
The majority of costs in personal injury cases are standard, and the written agreement will include them. They’re unavoidable, normal expenses, like court filing fees, as noted above.
There may also be some other expenses that aren’t standard and could be avoidable, particularly if they’re very expensive. Don’t be afraid to talk to your attorney about all expenses and go over everything ahead of time.
For example, maybe you set a dollar limit that your attorney can spend on things like depositions and hiring experts. Then, once they go beyond that amount, they have to get your approval to go further with any expenses.
There is some room for negotiation on some fees and expenses, but in order to understand what you want to negotiate, you need to read your agreement carefully before signing it. Don’t be afraid to ask questions when you have them, either.