Understanding Contingency Fees

In most Personal Injury cases, your attorney will do all of the legal work prior to payment. The attorney will agree to take a percentage of any monies recovered. This is called a contingency fee agreement.

Let’s say you have an attorney who charges the standard 33.33% contingency fee.  Your take away compensation from a $10,000 settlement is $6,666.66, which may be applied to outstanding medical bills if applicable, or it’s a non-taxable compensation to you.  

If you go to an attorney, Florida attorneys typically charge 33.33% of the recovered amount as their fee. Meaning, they have an interest in getting you the most compensation possible. You are responsible for the fees and costs, and this is where it can get expensive. So, it’s most important to hire an attorney who will make every effort to keep your costs low.  For example, is your attorney’s office paperless?  Do they use the most expensive court reporters and experts? Are they consulting you before they pay for things? Are they challenging big bills or paying without question? The attorney will generally front the costs, but you repay the attorney at the end. A full trial typically costs anywhere from $50,000 to $100,000.  However, if your attorney negotiates a settlement and based on their experience they advise you to take it because the cost of litigation will likely exceed recovery. For example, if you’re offered $100,000 and the attorney doesn’t think your case is worth much more, but you want a trial, the attorney may say it doesn’t make sense.

A typical closing statement will look something like this:

Settlement: $10,000 (this is what the insurance company agreed to pay and you agreed to accept. This money is paid into the attorney’s trust account to be disbursed appropriately. Don’t worry- the Florida Bar heavily regulates the handling of this money and the attorney has a lot to lose by misappropriating this money.)

Less Attorney’s Fees: $3,333.33 (this is 33.33% of the total settlement. It always is the first amount taken out. Costs come our of the subtotal)

Subtotal: $6,666.67 (this is your money, but what you owe your attorney and doctors will come out before you can get a check.)

Less Authorized Medical Payments: $1,000 (this is money that you owe your doctors for treatment. Your own doctor or insurance probably may a lien on your recovery when they found out that you had an attorney, so the attorney has to pay them before you can be paid.)

Less advanced costs: $250 (printing, copying, payments for records, and mailing)

Total to the client: $5,416.67 (this is yours to keep and use as you wish. Your debts related to the case should be paid. You will not be taxed on this money. Keep in mind however that it should be used for future medical care.)

We cannot stress this enough.  You don’t have to make a claim, and you do not have to sue anyone.  You just need to make sure that you have a conversation and you understand your rights.  If you don’t take the time to talk to a lawyer, you could be losing thousands, hundreds of thousands, and some times millions. There is no shame in being fairly compensated.  

If you have been injured in a car accident, call Plata Schott Law today at 904-619-5244 or email us at contact@plataschott.com.  No car? In the hospital? No problem. We will work with you to make a consultation convenient for you.