Standard contingency fee agreement
Prospective clients are sometimes “surprised” as to how personal injury attorneys are compensated. Many are under the misconception that personal injury attorneys – like most attorneys – are paid a retainer and bill out at an hourly rate. These clients are pleasantly surprised when we tell them that we get paid only if we win; they owe us nothing if we don’t collect. This arraignment is called a “contingency fee” agreement.
What is a contingency fee agreement?
Contingency fee agreements are customarily used for cases wherein a plaintiff is seeking monetary damages for some sort of injury (i.e. automobile accident, slip or fall, wrongful death, etc). A contingency fee agreement is a payment arrangement that allows an individual who has been injured and is seeking legal remedy to obtain legal representation even if they do not have money to pay a personal injury lawyer. When entering into a contingency fee agreement, the injured party does not pay the personal injury attorney any money up front, agreeing instead to pay the attorney a percentage of their “award” should they win the case at trial or enter into settlement terms with the negligent party or their insurance company. In a contingency fee agreement, the personal injury attorney will also pay the expenses (costs) of the lawsuit (including filing fees, investigators, medical records, experts, etc). Such costs will be paid back from the proceeds of the settlement, if any.
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In Florida, the standard contingency fee arrangement for personal injury cases is as follows (as prescribed by the Florida Bar).
- 33 1/3% of any recovery up to $1 million if my claim is settled without suit or if suit is filed, until the time that the defendant files an answer to the suit or files a demand for appointment of arbitrators;
- 40% of any recovery up to $1 million from the time the personal injury attorney files the lawsuit and the defendant files an answer or demand for appointment of arbitrators through the time of trial or entry of judgment. This percentage (40%) applies after the answer denying liability has been filed even if your case does not actually go to trial. However, if all defendants admit liability at the time of filing their answers and request a trial only on damages, then the fee due to the personal injury attorney, shall be limited to 33-1/3% of any recovery up to $1,000,000.00; and
- An additional 5% of any recovery after notice of appeal is filed or post-judgment relief or action is required for recovery of the judgment.
If the recovery is in excess of $1 million, the attorneys’ fee will be computed as follows:
- 30% of any recovery between $1-2 million;
- 20% of any recovery in excess of $2 million.
If the recovery is in excess of $1 million and all defendants admit liability at the time of filing their initial answers and request a trial only on damages, then the attorneys’ fee will be computed as follows:
- 20% of any recovery between $1-2 million;
- 15% of any recovery in excess of $2 million.
Do I have to pay my attorney even if they don’t win my case?
If you do not receive any money as a result of the accident, you will not owe us any fees or costs. By entering into a contingency fee contract, our personal injury attorneys accept the risk that your case may not lead to a fruitful settlement. Even if we spend hundreds of hours preparing for your case and thousands of dollars in costs, we will not get paid if you are not awarded a settlement.