What Is Contingency Fee in Car Accident Claims?

Contingency Fee

A contingency fee is a percentage of your settlement fee when you win a car accident claim. Most personal injury attorneys charge contingency fees if they recover a settlement or award for injuries sustained during an accident.

Most lawyers accept 30% – 40% of your settlement rather than charging an hourly fee. After an accident, most victims worry about expenses such as medical bills, loss of wages, and alternative transportation costs.

Hiring a lawyer on a contingency basis ensures you have someone to fight for your rights without paying a penny from your pocket. A lawyer working on contingency will not charge you any fees upfront or a retainer.

How Does a Contingency Fee Work?

Contingency fees come from the compensation that your attorney helps you recover. This fee is deducted from the settlement or the verdict award if your case goes to trial.

The most crucial detail of a contingency fee is that victims do not pay any charges unless their lawyer wins a settlement.

When you hire an attorney on a contingency basis, you sign a contract agreeing to pay a percentage of the proceeds of your claim.

You pay your lawyer’s legal fees after the case. You do not need to pay any fees during the case or if the attorney does not win a settlement.

Personal injury attorneys draw up a contingency fee agreement that outlines the agreed percentage and the services included in the fee. Typically, the contingency fee will include all legal services rendered to pursue a settlement.

Valid Contingency Fee Agreement

The American Bar Association requires valid contingency fee agreements to be in writing and signed by the client.

The contract must state how the lawyer’s fee will be calculated, the total percentage, and whether or not any expenses will be deducted before or after their fee is calculated.

A contingency fee agreement also outlines any expenses the client will cover. ABA Rules for Professional Conduct ensure that clients always know how much of their award will go towards lawyer’s fees.

Does a Defendant Pay Contingency Fees?

Only a person filing a car accident lawsuit can hire an attorney on a contingency basis. The person getting sued pays an hourly fee which may vary depending on your lawyer. You might also need to pay a retainer if you are the defendant.

Most insurance companies have a ‘Duty to Defend’ clause. This clause covers a policyholder if they are sued for an event that triggers coverage. The insurance company must pay for the services of a defense attorney.

If a driver does not have insurance or exceeds their policy limit, they must pay for legal services from their pocket. Depending on the attorney’s experience or the state they live in, the hourly rates can go up to $500 an hour.

What are The Benefits of a Contingency Fee?

There are numerous advantages to using a contingency fee agreement to hire a personal injury attorney. Some of the benefits include:

  • You do not have to use any money at the beginning or during your claim.
  • You can get the best legal representation regardless of your financial situation.
  • You do not owe any legal fees if you do not get a settlement
  • Your attorney is highly motivated to get the best outcome for your case because they do not get paid if you lose

In many cases, after a car accident, victims shy away from seeking legal help due to fear of hefty lawyer’s fees. However, a contingency fee arrangement allows you to get legal representation to pursue a settlement for damages or injuries.

Negotiating without an experienced lawyer often leads to the insurance companies offering far less than you deserve. However, an experienced attorney can help you get the maximum recovery possible if you have a valid claim.

A contingency fee arrangement gives you peace of mind and allows you to have adequate legal representation without paying any fees upfront.

Are There Fees If You Do Not Win?

The concept of a contingency agreement is that you do not pay any fees if you do not win. However, this may not always be the case. It is essential to read the fine print to ensure that your agreement states you will not incur any costs.

Some typical costs in a car accident case include:

  • Filing fees
  • Photocopying fees
  • Court reporter fees
  • Expert witness fees
  • Costs of obtaining car accident police and medical reports

These costs are typically paid by the attorney’s office during the investigation and can quickly add up to thousands of dollars. Always ensure that the contingency fees agreement outlines how such costs will be covered.

While some lawyers will not charge you fees if you do not win, others may require you to cover some of the costs if you lose.

The timing of when such costs will be deducted from your settlement also matters. Your contingency fee agreement should clearly state whether the costs will be deducted before or after the lawyer’s fee.

While these costs may be a source of friction between most personal injury attorneys and their clients, some are unavoidable.

Your contingency fee agreement should set a limit beyond which the lawyer must get your approval. This ensures you avoid unexpected high fees when you win a settlement.

What Happens at The End of The Case When Using a Contingency Fee Agreement?

Once your car accident claim is settled or you receive an award, your lawyer must provide an accounting. The accounting shows how their fee is calculated, which costs are deducted and how much their fee is based on the contingency agreement.

Your lawyer must also show whether the costs are deducted before or after their fees, depending on your agreement.


Some people can easily handle their claims without the help of a lawyer. If you can prove the other driver is liable and the car accident was minor, you may not need a lawyer to negotiate your claim.

However, the case becomes more complex if you have serious injuries or have difficulty negotiating with the insurance company.

You need an experienced personal injury attorney to help you navigate your claim and ensure you receive a fair settlement.

If you have been involved in a car accident, get in touch with a personal injury attorney to learn more about filing a lawsuit and negotiating a settlement. Read more on:- https://worldundrone.com/.

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