If you’ve just been injured in a car wreck or another serious accident, your loved ones might be urging you to get a lawyer. But in between your accumulating medical bills and your inability to work, you might think you can’t afford it.
Sadly, many injured people mistakenly believe that they have to pay for legal representation out of pocket. Most of the time, this is untrue. Instead of collecting payment up front, almost all personal injury attorneys are paid via contingency fees.
This article explains what contingency fees are, the maximum amount they can be in New York, and how they differ from case expenses in personal injury cases. Keep reading to learn more.
What Is a Contingency Fee?
Many attorneys who practice personal injury law work on a contingency fee basis, meaning their payment is contingent on winning a client’s case and recovering compensation for them. If you’ve ever seen an ad for a law firm saying “no win, no fee” or something similar, it means that the firm’s lawyers work on contingency.
Lawyers who charge contingency fees are paid a certain percentage of the total compensation they recover for their clients. If they win a case, they receive an agreed-upon percentage of the total compensation. If they lose, they receive nothing.
Lawyers who are paid via contingency fees take on a considerable amount of risk with each case. As a result, you may not be able to walk into a law office and hire an attorney on the spot. Instead, they’ll need to discuss your case with you first to determine if they are a good fit for your situation. If they think there’s a good chance they can win, they may offer to represent you.
How Much Is a Contingency Fee?
Contingency fees can vary greatly depending on many factors, so it is always important to discuss them with your lawyer. According to New York regulations, contingency fees in the state can range from 20% to 50% of the total compensation recovered. Attorneys may generally choose between two fee arrangements: Schedule A and Schedule B.
Schedule A
Schedule A is a sliding-scale fee arrangement where the fee depends on the amount recovered.
With this option, a lawyer may collect no more than:
- 50% of the first $1,000 of the compensation recovered
- 40% of the next $2,000 of the compensation recovered
- 35% of the next $22,000 of the compensation recovered
- 25% of any amount over $25,000
This may seem like a complex arrangement, but it ensures that attorneys are compensated fairly for lower-value cases, as the legal work involved is largely the same as for high-value cases.
Schedule B
The other option provided in the regulation caps contingency fees at one-third of the total compensation recovered. The regulation includes other important details about this arrangement, including the calculation method for the fee.
If an attorney offers to represent you, they’ll discuss their specific fee arrangement with you before you commit. They will also likely have you sign a contingency fee agreement in advance that outlines all the details of their payment structure. Review this document carefully and ensure that all your questions are answered before signing.
Contingency Fees vs. Case Expenses: Understanding the Difference
Every injury victim needs to understand the difference between attorney fees and case expenses. Attorney fees are what you pay your lawyer for their work on the case.
By contrast, case expenses are incidental costs, such as:
- Filing fees
- Costs for obtaining medical records
- Costs for securing deposition transcripts
- Expert witness fees
Many personal injury lawyers pay these costs up front and then deduct them from the client’s final compensation. It’s important to note that these deductions can be separate from the contingency fee calculation.
Law firms may absorb these expenses themselves if they lose a case. However, in some instances, they may ask clients to reimburse them for case expenses even if they don’t recover compensation. This is uncommon, but it isn’t unheard of.
Questions to Ask About Contingency Fees Before You Sign
Before signing a contingency fee agreement, the attorney should give you an opportunity to ask any questions you may have about the arrangement.
Some questions you might want to ask could include:
- Which fee schedule do you use—Schedule A or Schedule B?
- Is your fee based on the gross recovery or the net after expenses? What counts as an “expense”?
- If we lose, do I owe any case expenses?
- How do you handle medical liens, and can you assist in negotiating them down?
If the lawyer isn’t willing to answer all of your questions, it could be a sign that they aren’t a good fit to support your case.
Contact Our Middletown Personal Injury Lawyers for a Free Consultation
A serious injury can have a devastating impact on your life. If another party was at fault for your accident, you shouldn’t be left to deal with the fallout on your own. When you work with Rolo Law Personal Injury Lawyers, you don’t have to.
Our Middletown personal injury lawyers work on a contingency basis, so you’ll only have to pay us if we win your case. We also offer free consultations—contact us today at 845-383-7790 to schedule your complimentary case review. We can discuss how contingency fee arrangements work at our firm and answer any questions you may have about this type of payment system.
Visit Our Personal Injury Law Office in Middletown, NY
Rolo Law Personal Injury Lawyers
265 NY-211 Suite 106B, Middletown, NY 10940
(845) 383-7790
