In Florida, personal injury attorneys representing plaintiffs typically set up a contingency fee agreement. A client pays a contingency fee to a lawyer only if the lawyer handles a case successfully. Success in a personal injury suit can mean several things, ranging from a pre-suit negotiated settlement all the way through victory at trial.
In a contingency fee arrangement, the lawyer agrees to accept a fixed percentage of the recovery, which is the amount finally paid to the client. Percentages can change depending on the amount of recovery and the stage of the case during which the recovery is made. See below for an example of a typical contingency fee recovery agreement.
If recovery is made, the contingency fee shall be as follows:
- 33 1/3% of any recovery up to $1 million through the time of filing an answer or the demand for appointment of arbitrators;
- 40% of any recovery up to $1 million through the trial of the case;
- 30% of any recovery between $1-2 million;
- 20% of any recovery in excess of $2 million;
- An additional 5% of any recovery after notice of appeal is filed or in the event post judgment relief or action is required for recovery on the judgment.
Critics argue that contingency fee agreements are unfair, and unjustly reward the attorney. Keep in mind there are risks associated with taking on any legal case, especially personal injury cases. Insurance companies have teams of lawyers and experts working to defend claims. If your lawyer wins the case, their fee comes out of the money awarded to you. However, if you lose, neither you nor the lawyer will get any money. Clients are not required to pay their attorney for the work done on their case regardless of the amount of time and money an attorney puts into researching and preparing a case. The attorney’s fees are paid directly out of any money awarded to the client, if any.
In sum, attorneys that set up a contingency fee agreement take a risk. Sometimes it pays off and other times it does not. It is not a perfect arrangement; however it is an arrangement that allows clients, whom may not have financial means to hire an attorney, to recover damages for their injuries and put their life back on track.
Request a free consultation with Tampa Attorney John S. Castro regarding any personal injury questions you may have. Or please call 813-907-9807.