How Does a Contingency Fee Agreement Work in Personal Injury Cases?
The payment of attorney’s fees under a contingent fee contract is contingent on the outcome of the matter for which the legal services are rendered. Under most contingent fee contracts in personal injury cases, the attorney will only be entitled to recover a fixed percentage of any recovery.
What Should Be Included in a Contingency Fee Agreement in Florida?A contingency fee agreement contract must be in writing and it must be signed by the client and the attorney. A copy of the written contract must always be furnished to the client. If any other attorney or law firm is to participate in the contingent fee, they must obtain the written consent of the client and execute the contingent fee contract. Each participating lawyer shall assume joint legal responsibility to the client for the performance of the legal work as if each were partners. These requirements will prevent an attorney from accepting a case from a client and then referring it to another attorney to perform the actual work pursuant to a fee-splitting agreement between the attorneys without the client’s knowledge and consent. The written contract must specify the method by which the fee is to be determined. This requires disclosure of the percentages that the lawyer will collect as his fee if the case settles or is litigated, and if appeals are pursued. In addition, the contract must state what litigation and other expenses are to be deducted from the recovery and whether these expenses will be deducted before or after the contingent fee is calculated.
What Rights do Clients Have Under a Contingency Fee Agreement in Florida?A contingency fee agreement contract must provide a statement that outlines some of the rights clients are entitled to. It must also state that the client read and understands the statements and that the client has received a copy. In Florida, clients entering into a contingency fee agreement have the right to:
• Cancel the contract within three business days of the date the contract is signed
• Question the attorney about his education, training, and experience
• Obtain information from the lawyer concerning his actual experience in handling legal
matters similar to the client’s
• Know whether the attorney intends to handle the case alone or whether other lawyers will
assist him. If applicable, at least one lawyer from each firm that will be involved in representing the client must also sign the contract and the attorney must also discuss with the client the fee-sharing arrangement he has with the other attorneys that he refers the case to or who will assist him in the legal work. If the attorney decides to refer the case to another attorney or seek assistance from other attorneys after the fee contract is signed, the client should sign another contract with all of the attorneys who will be involved. The client will have the right to consult with each attorney working on his case.
What is the Percentage of Recovery That an Attorney May Charge in Florida?As a general rule, the attorney and client may structure their contingent fee agreement as they choose. But Florida law sets limits for the percentage of recovery that an attorney may charge. If the agreement exceeds those limits, it will be presumed to be excessive unless prior court approval is obtained to allow the attorney to charge more than the presumptive limit. Different limits are established for different stages of the litigation. Through the time of filing an answer or a demand for appointment of arbitrators, the contract may provide for a recovery of 33 1/3% up to 1 million dollars. For any portion of a recovery between $ 1million and $2million, the attorney may collect 30% and for any portion exceeding 2 million dollars the attorney may collect 20%. If a recovery is obtained from the time of filing an answer or demand for appointment of arbitrators through the entry of judgment, the attorney may recover 40% of any recovery up to $1 million. For any recovery exceeding $1 million, the attorney may recover 30% of any portion between $1 and $2 million and 20% of any portion exceeding $2 million.