In personal injury lawsuits, many times the payment agreement agreed between the plaintiff and their council a contingency fee agreement. Simply put, this means that the attorney is paid a certain percentage of any settlement paid out to the client. This can be a good thing because it allows injured parties who may not have been able to afford legal council a chance to be compensated for financial damages that occur do to an injury. One question that many people ask is whether or not the attorney percentage is taken before or after the medical fees are calculated. Let’s take a look at this important question.
There are two general ways that a contingency fee can work. First, the fees can be extracted from the settlement first. The attorney/client fee percentage would be calculated from the remaining amount. For instance, under this system, if the contingency fee agreement states that the attorney will receive 30% of a settlement after fees, then any fees and expenses would be extracted first. The remaining amount of money would be split according to the contingency agreement.
The other option is that the the initial amount of the settlement be split according to the agreement. Fees and expenses are then paid out from whatever party that incured those fees.
Each of these methods has its merits. If the personal injury lawsuit itself requires a lot of legal investigation and expert testimony, the legal fees can really pile up. If the medical fees are not that substantial, a fee agreement that splits the initial settlement amount may benefit the client more. This way, the client would avoid paying the percentage plus a substantial amount of legal fees. If there are substantial medical fees, an agreement that requires medical fees to be subtracted before the sum is split may benefit the client more.
The main thing to remember is that contingency fee agreements must always be in writing and signed prior to legal representation by the client and the attorney. This is an important legal requirement that exists in every state. In this way, the client has the ability to review the requirements and specifics of the fee agreement. This is an important legal requirement. An attorney who fails to present a contingency fee agreement in writing may face formal reprimand, fines, or other disciplinary action by the state BAR.
It is very important to sit down and talk to an individual attorney to make sure any questions with regard to fee agreements are answered before you even sign the agreement. You also need to make sure that medical fees are imcluded under “fees” and not just legal fees. It is the responsibility of the lawyer to make the agreement clear and to answer any questions. Failure to do so could have serious implications for the attorney, as it is against the code of professional conduct for attorneys in most states.
Attorneys are also not permitted to charge outrageous fees to clients. This would also constitute a legal breach of ethics. An attorney charging unreasonable fees may face not only actions of discipline, but they could also be sued for malpractice. In the malpractice lawsuit, the client may be able to recover fees as well as any compensatory damages and potential punitive damages.
Fee agreements are often essential in order to enable people to pursue justice in instances of personal injury. Although contingency fee agreements are different on a case by case basis, there is a system to make sure that the injured party is protected from unfair or dishonest fee arrangements. The best thing to do is talk to your attorney about any concerns that you may have. This can help you come up with an arrangement that fits your needs.