Contingency Fee: Hiring a Lawyer without the Risk of Financial Losses

Most people are concerned that resorting to a lawsuit means they have to spend a huge sum of money to pay the lawyer's fee. But fortunately, there are lawyers who agree to contingency basis which does not oblige the clients from paying the legal fees unless they have successfully received monetary compensation from the defendants.

Because of this arrangement, contingency fee is also called as "no win, no fee basis."

The amount of contingency fee will depend on the agreement between a lawyer and his client. But usually, a lawyer's fee is 25 percent of the settlement or 30 percent if the case proceeds to trial.

Importance of Contingency Basis

For more than a hundred years, contingency fee has allowed individuals with limited income to file a lawsuit against people or entities who have injured them.

This arrangement made it possible for ordinary people to file lawsuits against large corporations and influential entities and receive monetary compensation.

Some experts also believe that contingency basis is a very important part of the justice system in the US as it serves as an "equalizer" by giving everyone, regardless of his or her social standing and influence, to seek justice.

In addition, contingency fee creates a society which promotes the idea that no one is above the law and everyone is accountable for his or her actions.

Cases in Which Contingency Fee Basis are Applicable

Contingency fee does not apply to all cases, particularly to criminal lawsuits where the victims cannot receive financial recovery that would be a source of the contingency payment.

Also, this arrangement does not apply in divorce proceedings because the society favors the continuation of marriage which has been said to "domesticate" people and "consecrate" the relationship between a man and a woman.

Usually, contingency fee applies to civil cases particularly those involving personal injury lawsuits such as medical malpractice, car accident, and product-related injuries

Finding a Lawyer who Agrees to "No Win, No Pay" Arrangement

Before hiring a legal representative, people should talk to several lawyers to determine who among them will provide the "best deal" - or ask the smallest percentage of the settlement or award.

However, a contingency fee arrangement will not be valid unless there is an express contract. And to further protect the interest of people, contingency contracts are intensively scrutinized by courts to make sure that these are "reasonable" and "fair".