If you suffer injuries in a car accident and someone else caused the accident, you need a car accident attorney. Everyone knows that attorneys cost money, but what will yours cost?
The majority of car accident lawyers charge their clients on a contingency basis. Unlike most attorneys in other fields (such as immigration, tax and criminal defense), car accident attorneys usually will not get paid any fees unless you recover money in the lawsuit. So, your attorney does not get paid unless you do – they actually get paid a percentage of what you win. As you may imagine, this arrangement means that your attorney is strongly motivated to get you a large settlement or verdict.
Let’s take an up close look at just how contingency fees work, as well as what to expect if you hire an attorney to handle your car accident case.
How Contingency Percentages Work
The amount that a lawyer may receive in a contingency fee contract varies by state. In Oregon, a typical contingency fee is 1/3 of the total monies recovered in the case, but this can vary. Whatever the fee arrangement is with your attorney, be certain that it is clearly stated in writing.
So if the contingency fee agreement is 33.33%, and you win $100,000, your lawyer receives $33,333.33.
Note that the contingency fee could depend upon whether or not the defendant has responded to your legal complaint. If your accident case is settled before your complaint is answered, the percentage paid may be lower.
For instance, let’s say that you send a demand to the defendant and you reach a settlement for $100,000. The attorney on your case will receive $33,333.33, and your state allows the attorney to receive 50% of a recovery when the complaint is answered. So your attorney will receive $16,666.66.
Please discuss the contingency fee arrangement with your attorney. If you do not understand the fee structure in the contract, ask your attorney to make it clear to you.
Remember that just like anything in a contract, a fee is entirely negotiable. If your car accident case is very straightforward – that is, damages and liability are obvious, the defendant has plenty of insurance and/or is wealthy, and there is a lot of strong evidence to back up your claims – you should be able to work out a lower fee. If the lawyer does not have to do that much work on your case, you can make a strong argument that he or she does not deserve 1/3 of your award.
Fees and Expenses
Depending upon your attorney and the contract, you may or may not have to pay up front court fees and other related litigation costs.
Fees and expenses may include:
- Court filing fees
- Costs of serving a summons or subpoena
- Cost of getting medical records from a physician
- Police report
- Fee for court reporter
- Fees for expert witnesses
Many personal injury lawyers will mandate that you pay for these fees out of your pocket. If the contract states that you must pay these fees, expect your attorney to contact you for payment when they become due. If you cannot pay, your case may be delayed.
However, some large personal injury law firms cover all expenses and fees; just know that these will be taken out of the final judgment or settlement. So, if your car crash case settles for $100,000, let’s assume that your legal contract states that the costs and fees are deducted from the settlement.
If your lawyer incurred $10,000 in costs/fees, that would be deducted from your settlement, along with the $30,000 for his or her legal services. You will receive a final recovery amount of $60,000.
Your attorney should take the fee out of the ‘net settlement’. That is the amount after all expenses have been taken out. That is the typical arrangement. That said, some lawyers will take their money out first. You should tell them you will not allow this.
Different Fee Agreements
Not every car accident case has a pure contingency fee agreement. Some lawyers may want to collect a retainer to start the case, and a contingency fee at the end. However, if you win or settle, the amount that you paid your lawyer up front should be taken out of the percentage of the contingency fee. So, if you paid $2000 to the lawyer up front, and win $90,000, your lawyer will receive $28,000 of the settlement.
The majority of car accident cases do not have a flat fee arrangement. Flat fee arrangements usually are for very straight forward, cut and dried cases. A lawyer could charge you a flat fee if the legal work is simply drafting and filing a demand letter. This might be covered for a flat fee of $300 to $1000.
Should You Pay for a Car Accident Attorney?
Here’s your rule of thumb: The more serious your car accident injuries, the more your attorney is worth.
If you are in a minor fender bender with a scratch on your face, you may want to just settle it with the insurance company. It would not be worth 1/3 of your settlement to pay for an attorney.
However, if you are hurt more seriously and need medical treatment, the settlement value of your potential case rises fast. The insurance adjuster will be working hard to minimize your damages and get you to accept as little as possible. They make money by minimizing your settlement.
This fact is backed up by a 1999 insurance study done by the insurance Research Council. It determined that claimants who retained counsel received 3.5 times more in settlement money. Of course, they had to pay ~1/3 of their award to the attorney, but they still came out well ahead.
In a case where there are substantial injuries, you will nearly always benefit greatly from having an experienced car accident attorney negotiating your damages. Also, the threat of a pending lawsuit and trial often encourages the insurance company to give you a fair settlement.
There are several types of damages to which you are entitled in a motor vehicle crash caused by another party:
- Medical expenses: physical therapy, doctors’ visits, ambulance fees, in home services, permanent disability – past, current and future.
- Lost wages: A car accident can cause you to lose ability to earn a living. This may include your inability to work due to doctors’ appointments, time spent in the hospital, problems with physically doing your job and more. You are often entitled to lost wages both in the past and future, which need to be calculated precisely, usually by a personal injury attorney.
- Pain and suffering: This is for the mental and physical distress of your injuries. This is usually calculated with a multiplier by the insurance company, which will multiply your actual economic damages by a factor of anywhere from 1.5 to 4, depending upon the circumstances.
- Loss of affection or companionship: Your injuries could affect your ability to show affection or be a companion to your partner. This is also referred to as loss of consortium. These types of losses are claimed by the uninjured partner. These types of damages are common when the car accident victim dies and the surviving partner files a wrongful death lawsuit.
Which of these damages you are entitled to depends upon the exact circumstances of the accident. We recommend that you at least speak to a personal injury attorney at no cost after a serious accident. This is especially true if you have suffered substantial physical injuries.
Most people in car accidents do not realize that most injury claims result in settlement well before there ever is a trial. Also, most insurance claims also are resolved via settlement without a lawsuit being filed. The insurance company usually wants to settle as early as possible and get you to accept as little money as possible.
In many cases, you should have a personal injury attorney representing your interests with the insurance company. A good personal injury attorney can usually get more money out of the insurance company. What’s more, the threat of an expensive lawsuit by an experienced attorney can encourage many insurance companies to offer a fair settlement.
If you decide to settle out of court either with or without an attorney for your car accident injuries, there are some advantages:
- Receive compensation quickly
- Avoid costly attorney’s fees that add up quickly in a trial
- Avoid having to show up at several court proceedings
- No worrying about an unpredictable jury or judge (if you lose, you get nothing)
The key question to ask yourself is whether the risk of going to trial and getting nothing outweighs the difference between your settlement offer and your estimate of the value of your motor vehicle accident.
A demand letter is the typical first step to settle your car accident injury claim before filing a lawsuit. There is a great amount of evidence gathering and preparation needed before you write the demand letter. If you had had medical treatment, you need to get copies of all of your medical records. This can take weeks or months.
If you have missed any work, you will need to obtain your employment records that show your normal hours and salary prior to the injury. You also need to prove the time that you have missed.
Next, you should gather evidence that indicates that the other party is liable for the accident.
After you have gathered all of this information, you should write your demand letter. Describe the accident, how it happened, witnesses and other details. List the exact amount you spent on medical treatment. It also is a good idea to enclose copies of vital medical records that back up your claims.
After the insurance company receives your demand letter, there will most likely be back and forth negotiations about the exact settlement. For someone with substantial injuries, working with a personal injury attorney is strongly advised. A personal injury attorney is an expert in negotiating with insurance companies.
Most motor vehicle crashes are best settled out of court. That said, there are situations where settlement is impossible or not advisable. Occasionally, the insurance company will not respond to your demand letter. Or the settlement offer may be too low to seriously consider. Some plaintiffs feel that the actions of the other party were particularly reckless, and may want to obtain punitive damages on top of damages. This requires going to court.
To file a lawsuit, you and your attorney file a formal legal complaint and submit it to the correct court. The complaint also is served to the other driver. The defendant has 20 days to answer the complaint.
Next is the legal discovery process. This is where you and the defendant exchange information about the accident. Information may be gotten through the submission of written questions to the defendant. You also may request that the defendant submit documents to you. You also may obtain vital accident information through deposition, which your attorney will handle.
After that is the trial, where the judge or jury weighs the evidence and decides the case. This is often a lengthy and expensive process, and again, is a last resort for most motor vehicle crash claims.