If you're the victim of a car accident, you may be thinking of legal action. However, you can't proceed without an attorney. Next, you may be wondering about the cost. Can you handle the expense? Should you take on a claim on your own?
Legal professionals advise it's best to hire an experienced car accident attorney. Understanding the costs upfront will bring a sigh of relief. That's because most car accident attorneys work on a contingency fee basis. That means you are not obligated to cover the attorney's fee unless they win your case.
Without any attorney to represent you, an insurance company will find it easier to take advantage of your situation and give you less money. People who hire lawyers show it yields more satisfactory results.
Contingency Fees in Car Accident Cases
When you retain an attorney on a contingency fee basis for a personal injury case, the lawyer does not charge an hourly rate. Instead, the attorney earns a pre-arranged percentage of the case's court award in a settlement case.
This might cause you to ask: "How is this contingency fee percentage determined, and how is it negotiated?"
Standard Percentage Ranges
Industry standards exist regarding contingency fee percentages in personal injury lawsuits and claims. For most claimants, a straightforward car accident typically is not expected to involve protracted litigation. Therefore, a common structure for tiered contingency fees involves incremental decreases in the percentage based on the final recovery amount. Let's look at the usual percentages.
- Thirty-three percent to 40 percent of any recovery up to filing responsive pleadings or up until settlement discussions.
- The recovery amounts to twenty-five percent after filing responsive pleadings or initiating formal settlement negotiations.
- Twenty percent if a trial and/or appeal is necessary.
The higher initial contingency rate compensates the attorney for upfront case development work. If less effort is required to resolve the case via a settlement, the fee drops to 25 percent. Finally, if additional work, such as a trial or appeal, is necessary, you will typically incur an extra charge of 20 percent.
Subtracting Costs for Litigation
Subtracting the litigation costs before your attorney takes their contingency fee percentage results in a larger settlement for you. Therefore, timing is important in this case. If litigation costs are subtracted from the settlement after your attorney takes their contingency fee, your attorney will receive more, but you'll receive less in your settlement case.
You must deduct litigation expenses before your attorney takes their contingency fee to ensure you get more of the settlement award. This is important to note, as you might receive a little more in your award if you agree to this fee arrangement.
Complex Cases
Suppose a personal injury claim, such as a medical malpractice case, is more involved. In that case, an attorney may negotiate a higher contingency fee (sometimes up to 50 percent of the final recovery). That's because the case is considered a higher risk and involves more time and cost.
If costs are higher, the aim is to cover the lawyer's costs for the services rendered.
Sliding Scale Contracts
Sometimes, a lawyer charges a sliding scale rate versus a blanket percentage. In this arrangement, the attorney receives the maximum compensation if they reach a quick and early settlement. The percentages drop on higher recovery amounts that presumably involve more work. Sliding scale arrangements typically base fees on a client's ability to pay.
No fixed rules govern the situation. The above information explains how to calculate the percentages and why assessing them is crucial in car accident claims.
Disbursements, Expenses, and Other Legal Expenses
The pure contingency fee percentage alone does not account for all billable costs in car accident cases. Nearly all contingency fee agreements explicitly state that the client is responsible for reimbursing case-related expenses and disbursements, calculated separately from the attorney's percentage-based fee.
Standard Costs Charged for Car Accident Case Legal Support
Standard expenses that clients directly pay include:
- Court filing fees
- Process server charges
- Costs for obtaining medical records and police reports
- Independent medical examinations
- Costs related to deposing witnesses
- Expert witness fees
- Trial exhibits
Some agreements lump these expenses into two categories - litigation costs and recovery costs. Recovery costs come directly from a final settlement or award before calculating contingency fees. Throughout the case, the client may receive bills for litigation costs.
Knowing when and how fees apply is crucial for establishing your position. That way, you won't have to pay for expenses you're not expecting to pay - at least right away.
Non-Recoverable Expenses
Not all costs related to a car accident claim are recovered from defendants, even when the verdict is favorable. As a result, some attorneys take out loans to finance their upfront litigation costs. The contingency fee they receive includes the loan repayment and related interest costs.
Some of a lawyer's non-reimbursable expenses include the following costs:
- Renting of the office space
- Buying legal resources for research
- Paying staff salaries
- Buying equipment and supplies
That's why car accident lawyers must investigate and make sure they can prove negligence in the cases they manage.
Why You Should Choose a Contingency Fee Agreement
Despite the intricacies of calculating contingency fees, these fee structures benefit injury victims significantly. The main advantage of hourly billing is the sheer affordability - no upfront payments are required. You only owe attorney fees if your attorney successfully recovers damages.
Contingency fee arrangements give clients with limited means the same access to legal help as clients with other legal concerns.
If you have been in a car accident that was not your fault, hiring a personal injury lawyer can help ensure you'll receive full and fair compensation for your injuries, damages, and losses. However, lawyers charge upfront for some services, so remember that.
Before signing any fee agreement, understand what you owe and when to pay for the services. Subtracting from the final settlement typically includes filing fees, serving summons, gathering evidence, deposition costs, and expert witness expenses.
What Your Attorney's Fees Cover
So, what do those contingency fees cover? Your attorney's fee will cover the following responsibilities:
- Reviewing police reports to determine liability
- Interviewing witnesses
- Inspecting the crash scene
- Hiring skilled accident reconstructionists and other expert witnesses
- Determining sources of possible compensation under the law
- Documenting medical treatment and the related costs
- Estimating future medical costs
- Figuring lost income and loss of future earning ability
- Negotiating with insurance companies
- Filing a lawsuit becomes the necessary course of action if you cannot reach a reasonable insurance settlement
- Representing the client through the entire legal process
- Examining all options for recovery against multiple parties
- Avoiding and arguing the tactics insurance companies use to pay lower settlements
The Damages Your Attorney Will Seek: Why Paying an Attorney is Worth It
If injured in an auto accident through no fault of your own, the at-fault driver is responsible for providing compensation. Damages, through your lawyer's help, will be higher, thus making the payout you make to an attorney more valuable.
Economic Compensatory Damages
Medical expenses include past, current, or future medical bills for treating crash-related injuries. Therefore, these costs may include hospitalization, surgery, therapy, rehabilitation, medication, at-home nursing care, and even help with housekeeping.
Lost income - If injuries caused you to take time off work, you can recover lost income. Proof of your income and time missed from work is required.
Loss of future earning capacity - If disabilities resulting from crash injuries diminish your future earning potential, you may recover these projected lost income. Vocational specialists typically analyze future losses.
Property damage - Settlement costs include repair or replacement costs for damage to your vehicle or other personal property.
Non-Economic Compensatory Damages
Pain and suffering - You have the right to compensation for any pain, discomfort, stress, loss of enjoyment, or emotional trauma because of crash injuries.
Disfigurement - Your settlement claim may include permanent scarring and disfigurement due to injuries sustained.
Loss of consortium - If injuries affect intimacy, companionship, and caretaking with your spouse, you may recover damages.
Punitive Damages
In skilled instances where the accident resulted from gross negligence, punitive damages — monetary punishment for the at-fault party — may be recoverable. However, punitive damages are hard to obtain and vary greatly by state.
Other Cost Factors in Car Accident Claims
Remember to understand that each auto accident case has unique circumstances that can impact the time, costs, and efforts involved in resolving a car accident claim.
Factors that May Lead to an Increase in Legal Fees
Factors that may lengthen the legal process or increase legal fees may include the following:
- Suing the number of parties
- The number of expert witnesses
- The aggressiveness of the defense
- If the insurance company denied the claim outright
- If certain legal complexities define the case
- If you are appealing an unfavorable verdict
Regardless of the nature of your car accident case, it's important to be clear about fee structures, so you know the costs before you retain a lawyer.
Questions to Ask a Lawyer When Considering Legal Costs
If you suffered an injury in a car crash caused by another motorist, taking legal action may be the best solution. Key questions to ask when interviewing prospective attorneys include the following:
How many years have you practiced personal injury law? (Find an attorney who specifically handles vehicle accident cases in your state. Ideally, they should have at least ten years' experience and have proven successes.)
What is your track record of case results and settlements? (An established history of impressive settlements gives you more leverage when paying for a lawyer's services.)
What percentage of your practice is devoted to auto accident cases? (Again, you want an attorney focused on this specific area.)
How are your contingency fees structured? (Clearly understand fee percentages and know the costs you must pay.)
What is the claims handling process? (The lawyer should walk you through each step of the legal process so you know what to anticipate.)
Will you handle my case directly or pass it on to a legal associate? (Hire an attorney who will take the reins of your case from start to finish. If the case is complex, you may need two attorneys--one to gather evidence and interview witnesses and the other attorney to take care of the other responsibilities, including communications.)
How frequently will you contact me about the progress of my case? (Open communications ensure you won't experience surprises throughout the claim process. You want to ensure you feel good about paying for legal services and advice.)
Vet each prospective attorney thoroughly about their legal credentials/certifications, case philosophy, and track record. After asking the right questions, hire a lawyer who understands the full extent of your auto accident damages. You want to employ an attorney who demonstrates a willingness to pursue the maximum compensation.
Why A Lawyer Will Help You Save Money
Hiring a car accident lawyer can help increase your settlement and save money. That's because a seasoned accident lawyer has extensive experience calculating proper compensation values across various damages, including medical bills, lost earnings, and pain and suffering.
In addition, a car accident attorney understands some common injuries and their medical treatments, enabling them to accurately estimate future healthcare costs after an accident. This makes it possible for them to aggressively seek the maximum reimbursement from an at-fault party.
One study in 2018 found that attorney-represented accident victims received, on average, a much larger claim payment - a difference that was large enough to adequately cover the attorney's fees.
So, if you're wondering if the cost of hiring a car accident attorney is worth it, the answer is a resounding "Yes!" By hiring a lawyer, you'll receive a larger settlement for your claim and make more progress toward healing and recovery.
Ensure you understand the payment terms of your agreement with your attorney. Find out exactly what you'll receive in special damages and services for what you'll ultimately pay. Make sure the lawyer you choose will provide you with the type of service that will free you to get better quickly so you can successfully cover your bills and other related accident costs.
Contact a Car Accident Lawyer Today
The best route after a car accident is to follow the path that leads to qualified legal help. Contact a personal injury lawyer so you can get paid a fair settlement and focus on getting better. How much you'll pay will depend on your injuries, the accident's circumstances, and your future expenses. Talk over your case today with a lawyer to better understand your rights and responsibilities.