Only Pay if You Win: Contingency Fees Take the Risk Out of a Lawsuit

Only Pay if You Win: Contingency Fees Take the Risk Out of a Lawsuit

0282763001614025148.jpgOnly Pay if You Win: Contingency Fees Take the Risk Out of a Lawsuit  

If you are concerned that legal fees will prevent you from filing a valid claim, you need to learn about contingency fees. Contingency fees are a compensation arrangement between a lawyer and their client. Working on a contingency fee means that the attorney will not earn any fees unless the case is successful. The fees will then come in the form of a percentage of the recovered funds.

Understanding Contingency Fees

Many lawyers in Florida charge hourly fees for their work. The client will then get a bill for the time the lawyer spent on their case, regardless of the outcome. A contingency fee is different because you will pay an agreed upon portion of what you recover at the end of the litigation instead of paying hourly. If you do not collect anything, your lawyer will not recover any fees.

Why Are Contingency Fees Helpful?

Imagine that you are in an accident that another person caused. You suffered injuries that cost you money and caused you to lose time at work. You might not have the means necessary to pay a lawyer to pursue a claim against the person who caused you harm. The law recognizes that this is not fair, and so Florida permits attorneys to charge contingency fees that do not require an upfront cost to the client. This fee arrangement will take the risk off you and put it onto the attorney.

What Fees Do I Pay if I Win?

If you win and a jury issues an award or if you settle your case, your attorney will get a percent of the damages. The award will also cover costs related to the litigation, such as:

  • Fees for expert witnesses
  • Filing fees
  • Court fees
  • Transcription fees for depositions

Once you pay the fees, the remaining balance of the award is yours. Your lawyer can explain the likely costs and fees so that you fully understand the agreement.

Entering a Contingency Fee Contract

State law requires that contingency fee contracts between attorneys and clients contain detailed and specific terms. Florida Rule 4-1.5(f) states that the contract must outline in writing:

  • The method of the fee calculation
  • The percentages of fees based on the stage of litigation at which the case comes to an end
  • All expenses that the award will cover
  • Whether the cost of litigation charges will come out of the award before or after calculation of contingent fees

The client must sign the agreement to make it valid and will have the opportunity to withdraw from the contract within three business days of signing.

What Percentages Does a Lawyer Charge?

Florida law caps the percentage of fees that a lawyer can charge their client in a contingency agreement. The fee percentages vary based on the stage at which the lawsuit concludes and the amount of compensation the client recovers. If the lawsuit settles before the defendant files an answer, the fees are as follows:

  • No more than one-third of the recovered award for settlements up to $1 million
  • No more than 30 percent for awards of $1 million to $2 million
  • No more than 20 percent for awards greater than $2 million

After the defendant files an answer or the period in which the defendant should have filed an answer, the fee percentages increase. In these cases, the attorney's fees may amount to 40 percent on up to $1 million, 30 percent between $1 and $2 million, and 20 percent on awards above $2 million.

There are exceptional circumstances that may lead to different arrangements, so it is essential to understand the contract you sign.

Hiring a Lawyer

Lawsuits are costly, but a contingency fee arrangement can open the door for clients who have valid claims but cannot afford to pay a lawyer out of their pockets. By entering a contingency fee arrangement, you can engage an experienced attorney to represent you in your pursuit of the compensation to which you may be entitled.

If you have questions about whether a contingency fee arrangement will work in your case, contact Loshak Leach LLP at 954-334-1122 today.

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