Contingency Fee Agreements
Because injury accidents often produce a range of unanticipated expenses and immediate financial losses, victims routinely wonder how they can possibly afford an attorney to represent them in their fight for compensation. Fortunately, many personal injury attorneys regularly accept cases on what is known as a contingency basis, easing the way for injured parties to pursue justice. Contingent fee arrangements provide that clients pay little or no money up front to the lawyer handling their case and also that no legal fees will be due unless and until a successful outcome is achieved, whether via settlement or verdict. If you have suffered injuries due to the negligent acts or omissions of another, Denver personal injury attorney Jeremy Rosenthal is ready to investigate the facts of your matter, explain your legal rights and provide insights on how contingent fee representation works.
How a Colorado Contingency Fee Agreement Functions
Once an attorney and a client reach a contingency fee agreement, lawsuit expenses such as filing fees, deposition costs, medical records copying fees, expert witness fees and the like will be paid by the lawyer as they are incurred. The injured party being represented will not be required to pay any significant up front amounts in order for the case to proceed. Depending on the complexity of the accident event and harm sustained, these expenses can escalate rapidly, well into the tens of thousands of dollars. Thus, the attorney is assuming a great deal of risk in undertaking the representation, doing so with the intention of recouping those costs as well as payment for his or her time and expertise at the successful conclusion of the case.
Contingency fee agreements may be the lone option for personal injury victims with little to no financial resources to pursue a claim. Cases of increasing complexity may begin to accumulate a significant amount of costs. The lawyer is basically taking a chance by representing the client in the matter, hoping to recover the costs by prevailing at the end of the case with an award or settlement.
In many personal injury cases, defendants are insurance companies and other entities that may have significant resources at their disposal to defend claims; therefore, a contingency structure is important for the injured client. An attorney on a case contingently may be inclined to strategically minimize litigation costs, knowing that there is a chance that they will not be reimbursed for them. This is an additional benefit for clients when having to reimburse for these costs after an award or settlement occurs.
A provision within the contingency agreement states the amount, typically as a percentage, that the attorney receives from a settlement. Any costs incurred by the attorney necessary to further the case are also reimbursed at this time. The attorney will likely receive the settlement funds directly and then disburse the remaining funds accordingly. A common range of the percentage that the attorney will receive is between 30 and 40 percent, which may vary depending on the circumstances and jurisdiction.
Benefits of Contingency Agreements
As stated earlier, contingency fee arrangements can be extremely beneficial for injury victims who lack the financial resources to seek accountability and financial recovery following an accident event. They provide access to legal representation that would otherwise be wholly out of reach for far too many. In addition, they create a powerful incentive for the attorney to do everything possible to secure a positive outcome, since his or her compensation entirely depends on it.
Contingency Agreement Requirements
The contingency agreement should be clear and unambiguous. It should outline the responsibilities of all parties as well as other information as follows:
- Must contain names and contact information for the client(s) and attorney(s) involved
- A statement regarding the nature of the claim or services
- A statement explaining the percentage of compensation (pay) that the attorney is eligible to receive
- An explanation of any co-counsel arrangement and the proportional allocation of fees
- A statement that the client is liable for expenses incurred
- A provision specifying the manner disbursements are to be handled
- Authority for the attorney to incur expenses up to a maximum amount; client consent in writing is required in order to exceed this predetermined limit.
Provisions Prohibited in Contingency Agreements
- Any provisions that are unreasonable or unfair
- When prohibited according to the Colorado Rules of Professional Conduct
- In cases of marital separation or dissolution
- Compensation may not be tied to obtaining an acquittal or favorable outcome in a criminal matter
Withdrawal or Termination
An attorney who removes themselves or is terminated prior to a judgment or settlement typically is able to obtain reasonable compensation for work performed according to quantum meruit. This equitable theory states that a party who provides a service for another may recover losses. Time estimates may be used as a guideline for courts but is not a requirement. The agreement should inform the client of the prospect of this occurring.
Access to Justice for Colorado’s Injured
Denver accident attorney, Jeremy Rosenthal, does not believe that an injured party’s finances should ever stand in the way of their ability to pursue the compensation they need and deserve. Accepting cases on a contingency basis fulfills what he sees as a duty to render assistance to fellow Coloradans at their most vulnerable moments, while simultaneously providing unrivaled advocacy on their behalf. If you would like to explore the possibility of contingent fee representation in your injury matter, contact us at 303.825.2223.