Personal Injury Claim: How Are Personal Injury Lawyer Legal Fees Charged?
If you’ve seen personal injury lawyers offering their services for free, you’ve likely wondered where in the process they get paid and how, but it isn’t until you or a loved one is injured in an accident that the question becomes of vital importance.
When you or a loved one is injured in an accident that wasn’t your fault, you deserve to be monetarily compensated for damage to your physical, mental, and financial wellbeing. The best way to make a personal injury claim is with the help of an experienced personal injury lawyer who will be able to get you the most money for your claim. Read on below to learn everything you need to know about the legal fees personal injury attorneys charge for a personal injury claim.
How Are Personal Injury Lawyers Able to Offer Their Services for “Free”?
As you likely already know, hiring a personal injury lawyer isn’t actually free – they are offered on a “contingency” fee basis. This means they are only awarded their fee if you (the victim) wins, and they take their fee from the money you are awarded as the result of your claim.
About Contingency Fees
Contingency fees are calculated by taking a percentage of the total amount you are awarded. This percentage is typically between 33 and 40 percent, so if you were awarded $30,000, your personal injury lawyer’s fees would be at least $10,000.
Alternatively, your personal injury lawyer may charge their fees on a sliding scale. This means they will prepare a proposed fee agreement so their final fee will vary depending on how soon the case is resolved.
Contingency Fee FAQ
Can I negotiate for a lower percentage?
You can try to negotiate a smaller percentage, but most personal injury lawyers receive one third (33%) of the final settlement.
Can I negotiate to pay in a different way?
You may be able to, but you’ll need to discuss these options with any personal injury lawyer to see if they are open to this in your case.
What The Fee Process Looks Like at Each Stage of Your Case
Stage 1: ASAP After Your Accident
Contact prospective personal injury lawyers close to your accident as possible to get their advice on anything they want you to do and so you can have someone on your side going forward.
At this stage, your prospective or chosen lawyer will look at the details of your case and decide on the fee structure they believe will be best for your case; either a flat contingency fee or a sliding scale fee. You may decide to negotiate here.
Stage 1 FAQ
Do I have to accept a lawyer’s fees?
No, if you think a lawyer’s fees are too high then you can choose to shop around, but you should be aware that the industry average is 30-40%.
Who pays for costs and expenses?
You will, but not until the case is over. These expenses will be deducted from your share of the final settlement. Until then your lawyer will cover the costs and expenses to do what it takes to win your case.
What costs and expenses may I have to pay?
These expenses are the cost of sourcing medical records and police reports, covering expert eye-witness fees, postage and filing, trial exhibits, and other things that are necessary to win your case.
Is there anything to pay at this stage?
No, there should not be anything to pay at this stage.
Stage 2: The Demand Letter
Once you agree to move ahead with a lawyer and agree to their fee structure, they will send a demand letter to the person or body responsible for your accident. In most cases, this will be a business or the insurance company of an individual.
The “other side” of your claim may make a counteroffer there and then, at which point you and your lawyer can negotiate and come to a fair settlement before your case needs to go to court. If this is the case, your lawyer’s fee may be lower than 33% if the case was resolved quickly or be exactly the expected 33%.
Stage 2 FAQ
What costs and fees may I have to pay at this stage?
None, if your case is not settled at this stage.
If you are lucky enough to settle at this stage, your lawyer’s fee and costs will be deducted from your final settlement fee. If you do settle at this stage your costs incurred will be significantly less than if your case goes all the way to trial, so you should keep that in mind if you are offered a settlement at this stage.
Can I reject a settlement offer if I don’t want to accept it?
Yes, you can. Your personal injury lawyer will advise you on what they believe, with their experience, would be the best thing to do.
Can we negotiate a better settlement at this stage?
Yes, in fact only 11% of people accept the first claim.
Stage 3: Filing a Lawsuit
If the other side rejects your claim then your lawyer will move forward and file a personal injury lawsuit.
If you aren’t awarded your settlement until after you file a lawsuit, but is negotiated out of court, your lawyer’s fees may be at or closer to 40% because they will have had to put a lot more time and effort into your case.
Stage 3 FAQ
Will I receive a better payout if my claim gets to this stage?
It is likely you will receive a better payout, yes. The other side in your claim will want to do all possible to keep your claim from progressing to stage 4 (going to court), as once your claim goes to court it is no longer in their control. If they lose they won’t have room to negotiate with you.
In general, payouts are twice as high once a lawsuit is filed as claims in similar situations who settled before this stage.
Will my lawyer’s fees increase if they get to this stage?
Yes, it’s likely they will, unless you agreed to a flat contingency fee at the start of your case.
Will the costs and expenses increase if my case gets to this stage?
Yes, they will. Filing a lawsuit incurs various charges depending on where it is filed, and your lawyer may need to gather extra information in preparation for future negotiations or for your claim going to trial.
Stage 4: If Your Case Goes to Trial
If your case goes to trial your lawyer’s percentage may rise slightly higher than 40%, depending on what fee you agreed on when you chose to work with your personal injury lawyer.
Stage 4 FAQs
What total percentage should I expect my personal injury lawyer to take at this stage?
If your case goes all the way to trial you should expect the fees and costs incurred by your lawyer to win your cast to be 45 – 60% of the final settlement fee.
An Example Settlement at Each Stage
Let’s look at an example personal injury claim at each stage to see what costs and fees you may be able to expect.
Say you are involved in an accident on the road which causes you to spend a week in the hospital and take six weeks off of work. You start stage 1 and find a personal injury lawyer you want to work with. They draw up a sliding scale fee structure that, for simplicities sake (real proposed fee structures are likely to be more complex), looks like this:
Settled pre-lawsuit: 35%
Settled post-lawsuit: 40%
Settled at trial: 50%
If your case is settled at stage 2 with $40,000, your lawyer will have a fee of $14,000. At this stage your costs incurred were likely minimal, so you may have an additional 5% in costs and expenses ($2,000). This leaves you with $24,000.
If your case isn’t settled until stage three, after you file the lawsuit, for $40,000, your lawyer’s fees will be $16,000. If your costs and expenses increased to 7.5% ($3,000), your remaining settlement would be slightly less at $21,000, though your settlement amount may have increased. As you may have read in the FAQ section for this stage, payouts can double once a lawsuit has been filed, so this estimate is purely for illustrative purposes. If this was the case for this scenario, the settlement would be $80,000, and the total fees and costs would be $32,000 and $6,000 respectively, leaving you $42,000.
If your case goes to trial there is no longer room for negotiation and it will be out of the other side’s hands, as well as yours. Personal injury claims are unlikely to go to trial for this reason and can be expensive for all involved. If your case goes to trial but you still receive the same settlement ($40,000), your lawyer’s fees would cost $20,000 and expenses at 10% ($4,000) would leave you with $16,000. However payouts often increase dramatically at this stage, so you would hope to achieve much better than this.
Frequently Asked Questions About Fees from Start to Finish
How do I receive my settlement?
In most cases, your settlement will be sent to your lawyer to ensure they can take their fee and cover all costs incurred by the case. This is to prevent people from refusing to pay lawyers for their work. Your lawyer will contact you when they receive the settlement to talk you through what deductions have been made and why.
Can I dispute the deductions?
If you feel there has been a deduction made unjustly, you may dispute them. If this is the case your lawyer may place the disputed amount in a protected account until you come to an agreement on how to move forward.
What happens if I fire my lawyer before a settlement is reached?
If you have reason to fire your lawyer before the case is over and switch to a new lawyer or decide to represent yourself, you will have to pay their fees and expenses incurred thus far or else they may choose to sue you. If you must separate from your current lawyer talk to them, come to an arrangement, and get them to say in writing that they will not pursue further fees and expenses on the case.
It’s best to do your research well before you agree to work with a lawyer than get into this position.
How long does a personal injury claim take to resolve?
Most cases will take almost a year to resolve, while others take just a few months. While this can be unfortunate timing for those who are in some difficulty after their accident, your lawyer will do all they can to speed up the process without showing the other side that you wish to settle soon.
Why does the claim take so long?
Claims that take longer to resolve often mean you are more likely to have a successful case with a higher payout. You also don’t want to let the other side know you are looking for a speedy payout as they may use this to their advantage and offer you less money in your settlement.
If my claim goes to court will I get a bigger settlement?
Probably, but it’s not guaranteed.
How many claims receive a payout on average?
On average, 7 out of 10 claims represented by a lawyer receive a payout.
What is a typical payout amount for a personal injury case?
The amount you will receive varies wildly depending on where the accident took place, the circumstances around it, and on the injuries and damages you sustained. Most payouts range from $3,000 – $75,000, while others receive more. Ask your personal injury lawyer for more information on what they believe is achievable.
Are You Looking for a Personal Injury Lawyer?
If you have been the victim in an accident that wasn’t your fault, you need the support of a great personal injury lawyer to help you in this difficult time and get you the best settlement possible to help ease the burden of your injuries, physically, mentally, and other damages that have been caused in your life.
The Combs Law Group is here for you, we offer free legal consultations to help you decide what your next move should be. If you’re looking for expert one-on-one advice click here to arrange your free consultation today. We look forward to helping you take the first step forward toward the future.