Who Pays for Personal Injury Attorney Fees?

Jun 19, 2017 | Firm News

If you have a personal injury lawsuit, you may be wondering who pays the personal injury attorney fees.

Personal injury attorney fees are usually paid for by the plaintiff. However, since the plaintiff often gets his or her money from the defendant, it’s the defendant who indirectly pays for the plaintiff’s attorney. The arrangement that usually controls exactly how a personal injury attorney gets paid is the contingency fee agreement.

What Is a Contingency Fee Agreement?

A contingency fee agreement is an arrangement where the plaintiff’s attorney only gets paid if the attorney is able to recover something for the plaintiff. In other words, if the defendant wins the case and the plaintiff gets nothing, the plaintiff’s attorney gets nothing as well. But if the plaintiff is able to recover some amount, whether it’s from a jury verdict or settlement offer, the plaintiff’s attorney will get a portion of that amount.

How Much Does a Plaintiff’s Attorney Receive in a Contingency Fee Agreement?

The exact percentage will depend on the state laws and ethics rules that apply to the attorney, as well as the complexity of the case and how much work the attorney must do. However, most personal injury attorneys will take approximately one-third, or 33.3% of the total amount recovered. This percentage can sometimes range from between 20% and 40%, though.

What about Litigation Costs?

Whether a plaintiff wins or loses, the plaintiff will incur litigation expenses and fees, such as court filing fees, process server fees and special witness fees. These can be significant, usually adding up to a few thousand dollars, but they can easily be higher, topping five figures.

The plaintiff will usually pay these fees, with the only question being when the plaintiff pays them. The plaintiff can pay them either before or after the attorney receives his or her fee. We’ll look at an example to see how this can make a noticeable difference in what the attorney and plaintiff gets.

Let’s say a plaintiff is able to recover $100,000 in his or her lawsuit with the plaintiff’s attorney’s contingency fee percentage being 35%. Let’s also assume the litigation costs and expenses total $10,000.

If the first thing deducted are the litigation expenses, with the attorney’s fees deducted second, the plaintiff’s attorney will get $31,500 and the plaintiff will get $58,500. Because the litigation expenses get taken out first, the attorney gets 35% of $90,000 (which is $31,500) and the plaintiff gets 65% of $90,000 (which is $58,500).

But if the litigation expenses get taken out second with the attorney getting paid “off the top,” the plaintiff will only get $55,000 and the attorney will get $35,000. Here, the attorney is taking 35% of $100,000. This leaves $65,000, from which the $10,000 is then deducted, leaving $55,000 for the plaintiff.

As you can see, when expenses get taken out from the recovered amount can easily make a notable difference in the amount of money the attorney receives. For the most part, either arrangement is permissible, although the attorney must disclose which arrangement applies to the plaintiff.

For Additional Information

Find out what you need to know about personal injury attorney fees by calling the Wilbanks Law Firm, P.C. at (706) 335-2355.