After a slip-and-fall, car accident, or workplace injury, you may already face medical bills, lost wages, and other costs out of pocket. Hiring personal injury lawyers to represent you may be way beyond your financial resources. At the same time, you need legal assistance to pursue compensation as fast as possible.
For this reason, many personal injury attorneys offer a “no win, no fee” payment arrangement. This is known as a contingency fee basis – whether the personal injury attorney gets paid is contingent on securing a settlement or court award in your case. There is no upfront fee to pay, meaning a personal injury lawyer can begin working on your case as fast as possible.
One of the key advantages of this system is that it gives accident victims the confidence to pursue legal action with limited or no financial resources. However, in reality, how does it work?
To some extent, the answer depends on where you live. For example, in Connecticut, there is a specific contingency fee statute. This helps you to pursue legal action with a clear understanding of how much you will pay.
In this post, we will explore what you need to understand about contingency fee arrangements so you can pursue legal action and the compensation you need as fast as possible.
Defining Contingency Fees
A contingency fee arrangement means the personal injury lawyer’s fee is contingent on securing a successful outcome in your case. The law firm takes on the financial risk of pursuing the legal action.
A successful outcome may mean negotiating a settlement with the other party without going to court. Alternatively, success may mean winning your case in court and receiving damages set by the judge or jury.
No upfront payments
Whatever the outcome of your case, when you have a contingency fee arrangement, there will be no upfront legal fees. The attorney fees will be taken from your settlement or court award after concluding your personal injury case.
If your personal injury lawyer is unsuccessful
If your personal injury attorney does not successfully secure a payout in your case, there should be no fees to pay. Under the Connecticut Rules of Professional Conduct, personal injury lawyers are required to provide a contingency fee agreement before they begin legal proceedings. It is very important to carefully check contingency fee agreements before you sign them.
You may be liable for certain expenses even if you lose your case, such as:
- Court fees
- Investigator costs
- Other expenses related to gathering evidence
- Opposing party’s attorney fees and costs
Ensure you understand and agree with all fees before signing the contingency fee agreement. The most reputable law firms are upfront and transparent about all potential costs involved in your case and will gladly explain them to you.
How much will I pay if I win?
Contingency fee agreements set out the attorney fees if your case is successful. In Connecticut, this typically starts at 33 percent for the first $100,000 and then decreases for the remainder of the settlement.
It is also important to remember that the “fee” referred to in the “no win, no fee” agreement is the lawyer’s fee. As mentioned above, law firms incur additional fees when they pursue legal action. These fees may be deducted from your final settlement, meaning you keep a lower percentage of the compensation awarded.
Under Connecticut’s Rules of Professional Conduct, the contingency fee agreement must set out the following:
- The method by which the legal fees are determined
- The percentage that will be taken as the lawyer’s fee
- Whether and to what extent the client is liable for court costs and litigation expenses
- Whether the fees are deducted before or after the contingency fee is calculated
These arrangements let personal injury victims know exactly where they stand before the legal process begins. Connecticut’s contingency fee statute provides additional clarity about the fee percentage personal injury lawyers can charge.
Additional expenses you may have to pay
In addition to paying the lawyer’s fee, there are other costs to pay if you win your personal injury case. These will be deducted from your final settlement or court award. All potential costs must be set out in the fee structure of your contingency agreement before work begins on your case.
Costs vary from case to case but may include:
- Filing fees
- Court costs
- Expert witness fees
- Investigation expenses
- Administrative fees
- Deposition costs
- Medical record access fees
Ensure your attorney takes the time to explain every aspect of the retainer agreement and answer all your questions. You can also get a second opinion from another attorney on whether the costs are reasonable. Only when you are completely happy and have signed the agreement will your personal injury lawyer start moving forward with your case.
Contingency Fees in Connecticut
Connecticut General Statute § 52-251c places limitations on the contingency fees lawyers can charge.
This statute covers three types of cases:
- Personal injury
- Wrongful death
- Property damage
Percentage limitations in personal injury cases
This statute applies whether the case is settled out of court in a settlement agreement or through damages awarded at trial. It requires that the contingency fee is the only method of payment for the personal injury attorney in your case.
It also sets out the following caps on contingency fees:
- 33 percent of the first $300,000
- 25 percent of the next $300,000 (settlement or court award up to $600,000)
- 20 percent of the next $300,000 (settlement or court award up to $900,000)
- 15 percent of the next $300,000 (settlement or court award up to $1,2 million)
- 10 percent of any amount in excess of $1.2 million
These contingency fee percentage limitations are binding on personal injury lawyers unless the claimant decides to waive them. Why might that happen?
Claimant waivers
A personal injury lawyer may advise that he or she cannot take on your case without receiving higher fees.
A client may choose to agree to a waiver in the following situations:
- The case is particularly legally or medically complex
- It will involve extensive investigation or discovery proceedings
- It requires the testimony of independent expert witnesses
If a personal injury lawyer tells you that he or she cannot abide by the percentage limitations mentioned above, the law requires that the lawyer explain the reasons and provide a new contingency fee agreement.
You must be given time to review this and seek legal representation to assist you if needed. The contingency fee agreement must set out the fee schedule in full so there are no surprises at the conclusion of the case.
The statute states that although you may waive your rights to follow the percentage limitations, the lawyer’s fee cannot exceed 33 ⅓ percent of the total settlement or court award. However, if your case is not successful, the law states that you may be required to pay the costs your personal injury lawyer incurred in investigating and fighting your case.
The bottom line is that you must take time to read and understand the contingency arrangement and its payment structure before you sign. You should only sign the agreement when you are completely satisfied that you understand the percentage and additional fees you must pay at the conclusion of your case.
You may seek independent legal advice to determine whether the fees are reasonable. Once you sign on the dotted line, your personal injury lawyer can begin fighting for a fast and successful resolution to your case.
Example fees on a contingency basis
Let’s look at an example of how much you could pay if your contingency fee agreement follows Connecticut's percentage limits.
If you were involved in a car accident and the compensation awarded totaled $400,000, you would pay:
- 33 percent of the first $300,000 – $99,000
- 25 percent of the next $100,000 – $25,000
- Total contingency fee – $124,000
At this point, your compensation would be reduced to $276,000. However, depending on the payment model you signed up for, you may have additional costs to pay.
If you choose to waive the percentage limitations, your total contingency fee would be $133,333.33, or 33 ⅓ percent of your total settlement before other costs are considered. In this example, the difference between the two payment arrangements is relatively small. However, the higher your settlement, the more it will cost you to waive the percentage limitations.
Key Advantages of Contingency Fee Arrangements
When you are in pain and facing mounting bills, you need access to legal services – and fast. One of the key advantages of a contingency fee arrangement is that your personal injury lawyer can start legal proceedings quickly and pursue justice as fast as possible. With no upfront payment to consider and the law firm bearing the financial risk, you can confidently move ahead with your case.
Incentivize the personal injury attorney
When a law firm agrees to take on the financial risk of handling a case, you know they are fully invested in securing a successful outcome. More than that, your personal injury lawyers are incentivized to work diligently for maximum compensation on your behalf. The higher the settlement or court award they secure for you, the higher the lawyer’s fees.
Low to no risk for clients
If you work with a reputable law firm, there should be no risk involved in hiring a lawyer on a no-win, no-fee basis. However, always check that the contingency fee agreement guarantees you will not be liable for any additional costs if you do not achieve a successful outcome in the case. In this way, contingency fee arrangements provide access to legal services for many people who would otherwise be unable to afford legal representation.
Start your case as fast as possible
When medical bills and lost wages make your financial situation bleak, you do not want to wait to pursue justice. Contingency fee arrangements let you hire personal injury lawyers fast after your accident, allowing them to get started on your case more quickly.
This also ensures you do not miss the state limit on filing personal injury claims. In Connecticut, the limit is 2 years in most personal injury cases.
Pursue Justice Fast With Gould Injury Law
Contingency fee arrangements allow personal injury victims to pursue the compensation they need without worrying about how they will pay the attorney’s fees. Personal injury lawyers can start investigating your case, gathering evidence of liability and damages, and pursuing a fast resolution to help you rebuild your life.
The Connecticut personal injury lawyers at Gould Injury Law prides themselves on being fast, fair, and fearless in pursuit of fair compensation. We work on a contingency basis for our personal injury clients, meaning we will only collect money from you if we secure a successful outcome in your case.
Now is the time to pursue legal action and fight for fast and fair compensation. Schedule a free consultation with a Gould Injury Law attorney and learn about what we can do for you and our contingency fee arrangements. Call us at 888-WIN-FAST or fill out our contact form, and we will get back to you fast.
