What is a “Contingency Fee” in Jersey City Personal Injury Litigation?

In Jersey City personal injury litigation, a contingency fee arrangement is a common method attorneys use when representing clients. Under this type of agreement, the attorney’s fees are contingent upon the success of the case – meaning the lawyer only gets paid if they win or settle the case.

How Contingency Fees Work

When you enter into a contingency fee arrangement, your personal injury attorney will front the costs associated with the case, such as filing fees, the cost of gathering evidence, and expert witness fees. You won’t owe any attorney’s fees if your attorney fails to win or settle your case. The fee is a predetermined percentage of the amount recovered, which can fluctuate based on the complexity of the case and the stage at which it is resolved.

For example, if you settle a case for $100,000 and the attorney’s contingency fee is 33%, the attorney receives $33,000, and you receive the remaining $67,000 minus any expenses.

Advantages of a Contingency Fee Arrangement

A contingency fee arrangement offers several advantages for plaintiffs in personal injury cases, including:

  1. Access to Justice: Contingency fees make legal representation accessible to those who may not have the financial resources to pay attorney fees upfront. By eliminating the need for an initial payment, victims can seek justice without financial barriers.
  2. Alignment of Interests: This arrangement aligns the interests of the attorney and the client. Since the attorney’s payment is dependent on the outcome, they are incentivized to work diligently to achieve the best possible result.
  3. Reduced Financial Risk: Because clients are not required to pay attorney fees if the case is unsuccessful, the financial risk is substantially lower. This setup provides peace of mind, knowing that you won’t incur additional debt from losing a case.

What Percentage of a Settlement Can a Law Firm Charge?

As previously discussed, if your lawyer secures a successful settlement or verdict on your behalf, they will receive a set percentage of the money awarded. The fee given to the lawyer is based upon a percentage of the case’s net recovery. “Net recovery” refers to the total sum of money recovered for you, minus costs, expenses, and interest in a judgment pursuant to R. 4:41-11(b). A lawyer may not charge fees higher than the following:

  • 33.3% on the first $750,000 recovered;
  • 30% on the next $750,000 recovered;
  • 25% on the next $750,000 recovered;
  • 20% on the next $750,000 recovered; and
  • on all amounts recovered in excess of the above by application for reasonable fee in accordance with the provisions of R.1:21-7 paragraph (f); and
  • where the amount recovered is for the benefit of a client who was a minor or mentally incapacitated when the contingent fee arrangement was made, the foregoing limits shall apply, except that the fee on any amount recovered by settlement before empaneling of the jury or, in a bench trial, the earlier to occur of plaintiff’s opening statement or the commencement of testimony of the first witness, shall not exceed 25%

Contingency fees are a powerful tool for enabling access to legal representation for those who have suffered personal injuries and might not otherwise be able to afford it. While there are both advantages and disadvantages, the potential for justice without upfront costs remains a significant benefit for many individuals.

If you have questions about a case, we’re here for you and we work on a contingency-fee basis. Contact us today to schedule a free consultation.