Personal Injury Fee Agreements

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The cornerstone of any attorney/client relationship is a clear and concise understanding of the services the attorney will provide and how he will be paid. In order to avoid confusion, a detailed written agreement should be used. In personal injury cases, the fee agreement will identify the specific incident (i.e. automobile collision, construction site collapse, medical procedure performed) being investigated and the manner of payment. In almost all personal injury cases the attorney will be paid with a “contingency fee,” which is a percentage of the recovery made on the client’s behalf. If no recovery is made, no attorney’s fee is owed.In the metro Atlanta area, contingency fees for an automobile collision case are typically in the 1/3 to 40% range. Many attorneys offer a scaled fee, charging a higher percentage, if the case cannot be resolved prior to the initiation of litigation or if a trial is necessary. Some kinds of personal injury matters, like medical malpractice and products liability cases, can be of greater complexity and specialists in these areas may require higher contingency fees of 40% to 45%.The fee agreement should specify how case expenses will be handled. Expenses are typically in addition to the contingency fee and can be quite costly, even in relatively simple cases. In prosecuting a personal injury case, your attorney will purchase your medical records and police reports and may need to pay consultation fees to your physicians, engineers, economists or other experts. If a lawsuit is necessary, expenses will be incurred for court filing fees, physician depositions (many medical specialists are charging $1,000.00 per hour for their testimony!), videographers and court reporters. Depending upon the complexity of your case, these case expenses can range from a few hundred dollars to well over $50,000.00.If a case has merits, an attorney will likely front these expenses for you, but will expect to recover these expenses from your share of the settlement or court recovery. You will therefore be paying a contingency fee plus reimbursement of the attorney’s out of pocket expenses. Take for example, a relatively straight forward contested automobile collision case with a $45,000.00 recovery. You have agreed upon a fee of 1/3 of any sums recovered prior to suit being filed, plus reimbursement of the attorney’s out of pocket expenses. The attorney spent $500.00 in securing your hospital records and a detailed report from your orthopedic physician. Your attorney will receive a fee of $15,000.00 and expense reimbursement of $500.00, giving you a net recovery of $29,500.00.Be mindful that any statutory hospital or medical liens for unpaid medical expenses, or group health coverage or Medicare/Medicaid reimbursement/subrogation claims, will then be paid from your $29,500.00 portion of the settlement. Your attorney should explore the legal validity of any such liens and attempt to negotiate a reduction in those liens. The law involving subrogation and reimbursement liens is quite complex and is still evolving. Your fee agreement should specify that resolution of the liens is one of the services your attorney will provide.