Contingency Fees in an Ocala Personal Injury Case
Bill Allen | November 24, 2022 | Personal Injury
The cost of a personal injury accident can quickly escalate. HealthCare.gov says the average price of a broken leg is $7,500. On average, every day you spend in the hospital will cost an additional $10,000. These expenses are on top of the time you miss from work recovering from your injuries.
You may be nervous to seek legal help after a car accident or another personal injury incident because you do not want to incur another expense. With contingency fee arrangements, however, you do not have to choose between legal representation and financial security.
Hourly Billing Is Costly
When you think of hiring an attorney, you likely picture receiving a massive itemized bill for every phone call your attorney made and every email they read. Under this hourly fee arrangement, you and your attorney would agree on a fixed hourly rate that your attorney would charge for all work they perform.
You typically must pay for any incremental work done with an hourly fee arrangement. For example, if your attorney’s fee is $200 per hour and your attorney bills in six-minute increments, a ten-minute phone call with your attorney may cost you $40.
Hourly fee agreements also require the payment of a retainer, or down deposit, as well as regular payments to your account. Many agreements require you to maintain a minimum balance in your account as a condition of representation. Your attorney will then bill against this deposit account to get paid.
The worst part of hourly fee arrangements for personal injury victims is the financial responsibility for these fees. You are responsible for paying your attorney’s fees no matter the outcome of your case. You are responsible for the difference if you lose your case or obtain a settlement that does not cover your attorney’s fees in full.
Hourly fee arrangements used to be the standard method whereby attorneys would bill personal injury clients. However, this billing arrangement can be cost-prohibitive for injury victims, and Florida personal injury attorneys no longer favor using them.
Flat Fee Structures Offer Few Benefits to Clients
Some other attorneys may offer clients a flat fee arrangement instead of hourly billing. In this fee structure, you and the attorney agree to one flat fee to secure the attorney’s representation. The attorney may permit you to pay this fee in two or more installments.
A flat fee structure eliminates the possibility of a surprisingly-high bill at the end of your case. You know upfront the fees your lawyer will charge you and the services they will provide to you.
However, as is true in hourly fee structures, you must pay a flat fee no matter the outcome of your case. If your suit fails and you are not successful in recovering any compensation, you will still owe the flat fee.
Additionally, if you require more legal services, you will have to pay more fees to receive them. Your initial flat fee agreement may only cover attempts by your attorney to settle with the other party. If settlement negotiations fail and your claim proceeds to litigation, you will need to pay an additional fee to the attorney.
Contingency Fee Arrangements Make Legal Representation Accessible
Many personal injury attorneys have adopted contingency fee arrangements.
With this type of arrangement, the attorney’s fee is contingent on the lawsuit’s success. If the lawsuit results in a financial recovery for you, your attorney receives their fees. You are not liable for any attorney’s fees if the case does not succeed.
Not only are the attorney’s fees tied to the success of the case but the amount your attorney receives depends on the size of recovery they obtain for you. The attorney gets a percentage of the recovery obtained, subject to some limitations. The larger the recovery, the larger the fee the attorney receives.
Your contingency fee agreement must be in writing, and your attorney must allow you to review it before signing. Once you sign the agreement, you will have retained your attorney and they can begin working on your case.
Contingency Fees May Not Cover Costs
If you and your attorney agree to a contingency fee arrangement, be aware that the agreement may not cover costs associated with your case. Costs may include postage, obtaining medical reports, and other necessary activities to investigate your claim.
When discussing your contingency fee arrangement, make sure you understand the costs you will be responsible for paying. This detail should also be in writing and clearly described in your contingency fee agreement.
Limitations on Contingency Fees
There are some limitations on using contingency fees designed to protect you from predatory tactics.
Your lawyer must prepare a written contingency fee agreement and allow you to review and sign the agreement. This requirement ensures you know upfront the services your attorney will provide and the percentage of any damages award your attorney will receive.
The law also limits the percentage of any recovery your attorney can take. For example, in most situations, your attorney cannot recover more than one-third of the first $1 million in damages they secure for you. While you and your attorney are free to agree to a higher amount, a court must approve this arrangement.
If your lawsuit involves allegations of medical malpractice, the law further limits an attorney’s allowable fees. Your attorney cannot charge more than 30 percent of the first $250,000 they obtain for you. If you receive more, the attorney can receive 10 percent of any amount over $250,000 on top of the 30 percent already mentioned.
Obtaining the Legal Representation You Deserve
Contingency fee arrangements benefit both the lawyer and the client. The structure incentivizes the diligent and successful attorney by giving the attorney a portion of the overall recovery in one lump sum after the case. The client benefits from being able to retain an attorney without fear of being responsible for attorney’s fees if they do not win their case.
Contact Our Ocala Personal Injury Law Firm in North Central Florida
If you need legal assistance, contact the Ocala personal injury lawyers at Allen Law Firm at your nearest location to schedule a free consultation today.
We have three convenient locations in North Central Florida: