People often see news of big money settlements and think “WOW! That person has got it made” or “that lawyer made a nice payday.” The truth is, depending on the complexity of the case, that there is often very little resemblance between the judgment amount and what both the client and the attorney actually receive in the end.
Let me explain.
Unlike most lawyers, personal injury attorneys do not work for a set hourly rate. Their fees are paid on what is called a contingency basis. This means they will receive a portion of your settlement in exchange for their services. This also means, if they don’t win your case they do not get paid, and it could end up costing them both time and money — a lot of money.
Cost Associated with Personal Injury Claim
As we all know, nothing is free in this world, and preparing a personal injury case isn’t either. In fact, it can be quite expensive. Expert testimony and consultations, research fees, printing and copying, and deposition expenses are all costs that your attorney incurs while preparing your personal injury claim.
If your case isn’t settled in your favor, you still pay nothing but these expenses still have to be absorbed by your attorney. If your claim is settled in your favor, they will have to be paid from the settlement or judgment before you or your attorney receives any compensation.
Medical Liens
Another area that can have a great impact on the amount of compensation that you and your attorney finally receive is any medical liens that you may have against you.
You have to remember that many times a personal injury case can drag out for a very long time. Often, for you to continue to receive the medical care that you need and the examinations needed to prosecute your case, your attorney will file a “Letter of Protection” (LOP) with your medical providers.
In essence, a LOP is a contract between your attorney and your doctors promising to pay your medical bills from any settlement received in your case. It is a binding contract, and if your attorney does not stand good for the bills, he could be subjected to both a lawsuit from the medical providers and disciplinary action from the Florida State BAR Association.
Needless to say, by law, these bills must be paid from any settlement, court verdict or arbitration award that you win before any monies go to you and your attorney.
Variable Fee Percentages
As a personal injury claim progresses, it will require more preparation and make greater time demands on your attorney. Because of this, many lawyers use a variable fee scale depending on what happens with a claim.
For a simply negotiated settlement, they will charge a comparatively small percentage as a fee. If they are forced to take the case to court and either go through a trial or arbitration process, they will charge a slightly higher percentage to offset the extra time and effort involved.
You could think of this as them receiving overtime pay or a bonus for going above and beyond.
Contingency fee contracts can vary greatly from one personal injury attorney to another. When hiring a lawyer, it’s always a good idea to ask for a copy of the standard agreement and read it through thoroughly. If there is anything you don’t completely understand, ask questions. A good attorney will always have time to clarify things for you.
I hope this article has served to both clarify how contingency fees affect the final settlement that an injured party receives and temper the view that many hold about the amount of money there is in a personal injury claim. If you have any questions regarding personal injuries in the Melbourne Florida area, contact us at Sinclair Law. We are always glad to hear from you.