What does it mean to charge no fee until money is recovered in a California personal injury claim. On all retained tort claims related to accidents causing bodily harm due to negligence or wrongdoing, The Law Offices of Steven M. Sweat, A Professional Corporation, works on a “contingent fee” basis. This means that the fees charged by the lawyer are conditioned upon recovery of money by way of settlement or judgment by jury verdict. What does California law allow with regard to attorney client fee agreements which charge no fees up front for injury claims and what are the requirements for such retainers? What are the advantages of hiring a personal injury attorney without having to pay up front attorney’s fees or costs unless and until the case is resolved?
What are the requirements of a contingency fee agreement in California?
The Golden State has one main statute as it relates to retainer agreements which do not charge up front but, rather a percentage of the recovery. California Business and Professions Code section 6147 states, in relevant part, as follows:
- The fee agreement must be in writing and a duplicate copy must be provided to the client at the time the contract is signed.
- The covenant must state the exact percentage to be charged and state how this will be calculated (i.e. before or after costs)
- The scope of work to be performed must be specified
- The amount charged must be reasonable and negotiated between the parties. The contract must state that the amount is not set by law but, negotiable.
- The percentage must be reasonable. Customary percentages on personal injury claims and employment claims usually range between 25 and 45 percent, depending upon any number of factors. These amounts are set by law in a specified, structured amount in medical malpractice claims. Petitions on behalf of minors (under 18 years of age) are usually limited to 25% unless application is made to the court for a higher amount (rarely granted).
What are the advantages of a conditional fee arrangement for an accident victim?
For the client, the main advantage is that they do not have to pay a lawyer by the hour to prosecute their claim. Most attorneys also advance most if not all costs related to bringing the action for personal injuries. This allows clients of moderate to modest means obtain justice. It also provides a huge incentive for the legal counsel to: (a) take on only those cases with merit that have a good potential for recovery; and (b) work as diligently as possible to obtain a settlement or verdict so that the lawyer can get monetary compensation for the client and earn their fee. In many other areas of the law such as business disputes, divorce, criminal defense and other practice segments, the client must pay up front for the attorney’s services. This sometimes leads to persons getting assistance from legal aid, public defenders and other services that are overburdened and not able to provide as adequate a representation as a private lawyer might.
What is our law firm’s philosophy on contingent fee pacts?
We are strong believers in the power of allowing every person access to the civil justice system. We feel that the conditional fee structure allows for meritorious accident and injury claims and wrongful termination actions to be brought for persons that might not otherwise be able to afford to pay a lawyer out of pocket, hourly fees or costs. We also view this compact as providing a huge inspiration for our team of legal professionals to diligently litigate cases to maximize their value. Each case is different and we negotiate these engagements on a case by case basis.