I’ve recently been speaking with personal injury lawyers about the possibility of a lawsuit for a medical injury. I have a very good case. When I read the terms I was shocked beyond words that there is a 40% fee PLUS expenses of the GROSS amount awarded. This is insane! Expenses? Might as well add another 10-15%. What about taxes? Surely I’ll have to pay taxes on the same gross amount and not what’s left over after the lawyer stuff their wallets. The state will grab their share and the feds will want to get their greedy little hands in it too. What is that going to leave me with? A measly 10% if I’m lucky? This is what having my life destroyed is worth? Everybody makes out but me, and I’m the one that is suffering. Whatever amount is awarded is for me, to compensate me for the pain and suffering I have to live with for the rest of my life! I agree that that there should be some fee for all the work done, but not to the point of leaving me penniless! It's not for some attorney to buy a new Ferrari or take their family on vacation to Hawaii for a month while I’m tossed out on the street because I have no money to pay my bills and no ability to work!
The terms of contingency agreements vary between firms. However, continence agreements are high because the firm is taking a huge risk. The firm is fronting the money for the litigation, which can be enormous. Additionally, the attorney is not being paid for their time. Furthermore, if the case does not turn out well, the attorney will take the loss.
It is very understandable that you are frustrated with the idea behind contingency fees, but you have to realize that the attorney is taking a risk as well. Even with a strong case, one can never know what will happen.
Without the potential for a decent payout in the end, it would not be worth the attorney's risk, and they would just take regular billable per hour clients.
The process can be frustrating. Best of luck with your case.
Your understanding of what you end up with is inaccurate. The award or settlement for personal physical injuries or physical sickness and is non-taxable. As for the contingent fee, you should also consider medical malpractice contingent fees in Massachusetts are governed by statute and the percentage is a sliding scale (40% of first $150,000 and less thereafter), medical malpractice cases in Massachusetts almost always go to trial and are very difficult for patients to win, and most importantly, the attorney you retain is assuming all of the financial risk and advancing all expenses, including expert witness fees, which can get pretty high. If you don't win or obtain a settlement, your attorney gets nothing for all of the time and service provided in your case. Even if you do prevail, after the lawsuit and any appeals, it could be years before your attorney is paid anything for the services and time. the alternative is to pay your attorney on an hourly basis and assume all of the risk for its success yourself, which is probably not a realistic alternative to many people. I hope this was helpful.
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40% plus expenses is pretty standard if it is taken to trial. You don't have to do it on a contingency basis, pay the attorney by the hour and pay the retainer up front. If you don't have an attorney, how long will you last dealing with dealing with this case on your own....
If I recall the basic tax rules, these payouts are generally exempt... You'll get 60 percent minu expenses.
And you're right we all buy new Ferraris and take families to Hawaii, along with paying office space, employees, malpractice insurance, phone bills, Internet, online research services, health insurance, workers comp and unemployment for employees, computers and printers, professional publications to stay up on the law, utility bills for the office, im sure I missed a few expenses in here....
They're is actually a financial incentive for the attorney. The larger the award, the larger your pay out and the attorneys. That ensures that they will work hard for you. ... There's a risk here if you lose, they get nothing and then they donated a ton of legal help to you, there's no guarantee any case will win so there is a risk...
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I agree with you. A tiny handful of us top-rated lawyers have fees in the 20's so our clients don't get hurt twice. Use the lawyer finder tool
Here is the issue. THese cases are very risky and expensive to pursue. Lets talk about risk. Do you believe there are a lot of frivolous lawsuits being filed. If you do you have bought into the propaganda from the insurance companies and the Republican party. Fact is that is not now nor has it ever been true. People who think like you are your jurors. They start off with the idea that you are just a scammer looking for money. The laws passed under the guise of "tort reform" have also made these cases very risky to pursue. In my state the second best jurisdiction to file a medical malpractice case is Allegheny County--Pittsburgh. If you cannot file in Philadelphia your best statistical chance of winning a medical malpractice case is in Allegheny County. Let me tell you how good those statistics are: Doctors win between 93-95 % of the time. Again this is a county where you want to file your case. With those statistics lets talk about cost and put aside the expenses just getting to a trial. Experts are necessary to appear at trial to testify that the care and treatment you received fell below the standard of care and caused an injury. It is not unusual for a expert to charge $25,000.00 per day to appear. Most cases require more than one expert. An attorney I share space with needed in a recent trial 6 experts. As you can see lawyers with these odds and these expenses do not file frivolous lawsuits. THink about that 95 percent loss rate again. Do you really think every one of those cases was frivolous. Is that possible? Juries turned away legitimate claims. Remember if an attorney is handling your case on a contingent fee basis she puts in all her time, puts in all her money and if there is no recovery she loses all of it. This is basically gambling. If an potential client wants to pay me by the hour and will cover those expenses I certainly would consider that arrangement. Basically I did not create your problem, you were the victim of someone's carelessness and that person(s) or hospital will not take responsibility for what they did. I will help my client but I must have some incentive to spend my time and money. If I did estate's work I might write you a will. You pay me some fee and you get a will. I am not suggesting writing wills is easy but in a short period of time both attorney and client have received something. With medical malpractice cases the risks are very high. With regard to taxes, unless your legislature has succumbed to the calls by Republicans who don't like takes except for personal injury cases, there are no taxes on a settlement or verdict based on pain and suffering.
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The bottom line is this: The personal injury lawyer takes every penny of the actual financial risk. He pays all costs of the litigation so you don't have to. He doesn't collect a fee unless he recovers- unlike a lawyer who bills by the hour and charges you irrespective of the outcome. The contingency fee is the fairest of all fee agreements because the lawyer has actual skin, often times a lot of it, in the game with you, If you don't like the amount of the fee charged, you can always try to do this for yourself and when you hit it big you can go on vacation in Hawaii and buy an new Ferrari.
There are certainly lawyers, and some very good ones, who likely will charge a smaller fee. Feel free to look for one. But, at the end of the day the attorney is performing a job and like any other worker, deserves to get paid for his work. Here, he only gets paid if he is successful. Not too many other jobs where you only get paid if you win, and have to shell out your own money in doing so.
Best of luck to you.
Disclaimer: This answer is based on the limited information provided in your questions. This answer does not constitute legal advice nor does it create an attorney/client relationship. You should seek advice from an attorney with whom you can discuss the entirety of the case and is familiar with the laws of your specific jurisdiction.
First, let me say I am sorry you have suffered from what sounds like medical malpractice. Your recovery is generally not subject to taxes. The contingent fee agreement has been called the poor man's key to the courthouse. While the percentages may sound high, you will be better served if you hire an experienced local medical malpractice attorney. You generally get what you pay for in life.
As I see it you have four options. 1. You can try to do it yourself, and you might be offered some nominal settlement. Your case will not be taken very seriously if you don't have representation. 2. You can try to hire someone on an hourly basis. The top attorneys will require a very high hourly rate and will be paid, win or lose. Based on your comments above, I don't think, financially, this is a realistic option. 3. You can hire a good lawyer on a contingency fee basis, knowing they are highly motivated to win your case because they only get paid if you recover and the more money they get for you, the more they get also (and you are both happier). If you have a strong case you might be able to get some attorney to discount their fee a little to take the case, but the best attorneys are in high demand and are not likely to do so. Medical malpractice cases are not easy to win. Doctors fight hard to save their reputation and their Insurance companies hire top lawyers on an hourly basis defend them. I suspect their lawyers will find "holes" in your very good case and you will need an experienced attorney to "plug those holes." Cases can take many months and often years to go through the court system. You should be thankful the contingency fee system is in place so you have an opportunity to obtain justice with a lawyer who can go toe to toe with the doctor's lawyers. 4. You can complain about how much the lawyers make and what they will do with their money. While they may drive fancy cars and take nice vacations sometimes, they are usually paying their support staff, paying the rent on their buildings, paying taxes (lots of taxes) and paying the expert witnesses necessary to win their cases for the months and years while their cases are going on, hoping the contingency fee case pays off in the end. If they lose the case, they get 40% of $0 and while you are supposed to be responsible for the out of pocket expenses, they realize they will have to eat them because you have no money (This can be many thousands of dollars in a med mal case). While option 4 may make you feel better, you are no closer to getting justice. The doctor's insurance company hopes you are so put off by the 40% contingency fee they can settle with you for pennies on the dollar. The insurance industry has done several studies revealing injured parties NET twice as much, even after the lawyer is paid.
I hope your vent made you feel better, because it did not help you get any closer to getting compensated for your injuries. Now, go hire a lawyer who is willing to take the risks associated with that contingency fee and be thankful that option #3 exists.
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