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What is a Contingency Fee?

February 1, 2023 Personal Injury

Being injured usually causes a financial strain. So figuring out how to afford a lawyer to represent you is a major concern many people understandably have. Thankfully, most personal injury lawyers work on a “contingency fee.”

What does that mean? Let’s discuss.

Breaking Down the Contingency Fee Payment Model

Contingency fees are a common payment arrangement for personal injury cases in the state of Alabama. In this type of fee arrangement, the attorney agrees to represent the client on a “contingency” basis, which means that the attorney only gets paid a percentage of the settlement or judgment. If the case is not successful, the attorney does not get paid.

In Alabama, the percentage of the contingency fee varies depending on the type of case and the attorney. In personal injury cases, the fee is typically around 33% to 45% of the total settlement or judgment. In car accident cases, the contingency fee is typically around 33.3%. In medical malpractice cases, the contingency fee is typically around 40% to 45%, depending on the complexity of the case.

What are the Most Common Percentages?

While each attorney has their own contingency fee payment structure, here are the most common fee percentages for each type of personal injury case:

  • Car Accidents:  33.3% to 45%
  • Workers’ Compensation: 15%
  • Medical Malpractice:  40-50%
  • Nursing Home Abuse & Neglect: 40-45%
  • Dog Bite Incidents:  33.3%-45%
  • Industrial Accidents Due to Negligence:  33.3%- 45%
  • Slip or Trip Injuries:  33.3% — 45%

It’s important to note that these percentages may vary from lawyer to lawyer, and you should ask about the contingency fee percentage when meeting with a personal injury attorney.

At this point, you might be asking, “why is there a difference between car wrecks and medical malpractice?” The answer is that often times, medical malpractice cases are much more difficult to win than a car accident case. Medical malpractice cases require your lawyer to hire medical experts who practice in the same exact area as the doctor you are suing. The cost of these experts are paid up front by your lawyer. The lawyer only recoups these costs if the case is successful.

Since most medical malpractice cases are expensive from your lawyer’s viewpoint and are difficult to win, the lawyer will charge a higher contingency fee to offset the risk of not recouping those costs.

Are There Any Other Fees on Top of the Contingency Fee?

Generally, yes. When meeting with a personal injury attorney in Alabama, there are typically no out-of-pocket expenses for the client. The lawyer will cover all of the costs associated with the case, such as court fees, expert witness fees, and other expenses. If the case is successful, the attorney will deduct these costs from the settlement in addition to the contingency fee. Lawyers are only allowed to recoup costs that are reasonable and necessary to handling the case.

What is a Fair Contingency Fee?

It’s also important to note that in Alabama, there is no fixed cap placed on the amount that a lawyer can request in a contingency agreement. However, Alabama Rule of Professional Conduct 1.5 does place limitations on the percentage amount to ensure that the contingency fee is not “clearly excessive.” Contingency fees in excess of 50% are generally considered to be excessive in most injury cases.

When choosing a personal injury lawyer, it’s also important to consider their experience and track record. A personal injury lawyer with a good track record of winning cases is more likely to be able to successfully negotiate a higher settlement. Such a lawyer may charge a higher contingency fee since their reputation and legal skills merit it.

Are There Any Other Payment Methods?

Contingency fee arrangements are not the only way to pay for a personal injury lawyer in Alabama. Some lawyers may charge an hourly rate or a flat fee. While this is an uncommon practice, it’s important to ask about the different fee arrangements when meeting with a lawyer and to choose the one that is best for you and your specific case. However, it’s most personal lawyers’ common practice to provide legal services on a contingency fee basis.

Don’t Worry About Paying a Personal Injury Lawyer Up Front

In short, what do you need to know? Contingency fees are a common payment arrangement for personal injury cases in the state of Alabama. Therefore, you have no need to worry about having to pay a lawyer out-of-pocket.  Take advantage of this payment model and hire a personal injury lawyer today. Don’t wait to pursue your injury claim any longer.