Understanding a California Contingency Fee Agreement – Personal injury lawyers
Personal injury attorneys customarily handle personal injury cases on a contingency fee basis. Contingency fee agreement means that the attorney will get paid a percentage of the gross or net recovery depending on the terms of the agreement. If there is no recovery, the attorney does not get paid.
This type of fee arrangement makes it possible for an injured person to hire a personal injury lawyer without having to pay attorneys fees as the case is in progress. An obvious benefit is to have the benefit of legal counsel without having to pay for it up-front. But because the personal injury lawyer is assuming a risk that there will be a recovery and also has to wait to get paid, the attorney fees are likely to be more than if a person could pay the fees along the way.
In California contingency fee agreements must be in writing. The percentage of attorney fees is not set by law and is negotiable; however, most personal injury attorneys charge 33.33 % of the gross recovery before a lawsuit is filed and 40% of the gross recovery after a lawsuit is filed. These are the fees commonly charged by Los Angeles personal injury attorneys and also personal injury attorneys in the surrounding counties such as Orange County and Ventura County.
Some personal injury attorneys will negotiate the fee, so it is worth talking about with the attorney you want to retain. An attorney is prohibited by the Rules of Professional Conduct from charging an unconscionable fee, but the contingency fees just mentioned are not considered unconscionable.
There are two exceptions to the commonly charged contingency fees. One exception is when a minor is injured. Generally, the contingency is 25% prior to a lawsuit and 33.33% after the lawsuit is filed. Unlike contingency fee arrangements with adults, a court has to approve the fees to be paid to an attorney. A formal application must be made to the court to approve the settlement and the attorney fees.
The second exception is the contingency fee charged in a medical malpractice case. A California statute sets the maximum percentage that can be charged based on a formula related to the amount recovered.
If you are injured by the negligence of another, you should be represented by an experienced personal injury attorney. At the outset of the attorney-client relationship, make sure the fee agreement is memorialized in writing and that you understand its terms and conditions.