What this means is that there is no attorney fee unless you win. This is important because many people injured as a result of someone else’s negligence do not have the upfront capital necessary to file a case, pay for a lawyer, hire expert witnesses and do the investigation that is critical to proving their losses in court. In a sense, a contingency fee arrangement opens the courthouse doors to those who otherwise would have no other means. Payments are made based on a percentage of the total awarded either through settlements or jury verdicts.
These percentages are typically fixed and they may vary depending on the complexity of the case and the length of time it will take to obtain a resolution. While these agreements are beneficial to both plaintiffs and their attorneys, it’s important important for both parties to be on the same page about them. That’s what the case of Chalfant v. Guardianship of Flannigan illustrates.
This was a case before Florida’s Second District Court of Appeal, and it involved a contingency fee agreement between the guardian of a man who suffered a traumatic brain injury after falling from a second-story balcony during inspection of a home that was under construction. He was permanently disabled. The man’s guardian sought compensation from three defendants.
The first attorney hired by plaintiff obtained settlement agreements from two defendants, though plaintiff rejected those offers as too low. Plaintiff subsequently hired the attorney in this case, who negotiated two new settlement agreements with those same defendants for amounts higher than initially agreed upon. The attorney also negotiated a settlement with the third defendant. In total, plaintiff was awarded $2.5 million.
Plaintiff and attorney had a contingency fee agreement, but plaintiff argued the attorney shouldn’t be paid based on a percentage of the gross amount obtained, as the agreement stated, but rather on the sum that was in excess to the first agreement. Although a trial court initially sided with plaintiff, the appeals court reversed.
The Florida Bar Association does have rules governing contingency fee agreements. Rule 4-1.5 covers:
- Excessive fees and costs
- Factors to be considered in determining reasonable fees and costs
- Enforceability of fee contracts
- Duty to communicate basis or rate of fee to clients
- Contingent fees
Our Palm Beach injury attorneys encourage our clients to be educated about these regulations and their rights.
In terms of the factors that are considered in determining what is reasonable, the Bar puts forth the following:
- Time and labor involved, the novelty, complexity and difficulty of questions involved and skill required to properly perform the legal services;
- The customary nature of that fee for comparable or similar legal services in that region;
- The significance of the subject matter or amount involved;
- The time limitations imposed by the circumstances or client;
- The nature and length of the professional relationship between attorney and client;
- Experience and reputation of the attorney or attorneys involved;
- Actual amounts charged by third parties to the attorney for the case;
- Whether the fee is fixed or contingent.
Specifically with regard to contingent fees, the guidelines vary depending on the length and complexity or proceedings, but unless there is a prior court approval, if a case is negotiated prior to trial, the most an attorney can receive is 33 1/3 percent of the first $1 million, 30 percent of any portion between $1 million and $2 million and 20 percent of any portion exceeding $2 million. If the case goes to trial (which inevitably takes more time and preparation), the attorney can collect no more than 40 percent of the first $1 million, 30 percent of any recovery between $1 million and $2 million and 20 percent of any recovery exceeding $2 million.
If you have been injured in an accident, contact the Hollander Law Firm at (888) 751-7770 for a free and confidential consultation. There is no fee unless we win.
Rule 4-1.5 Fees and Costs for Legal Services, The Florida Bar Association
Chalfant v. Guardianship of Flannigan , Nov. 18, 2015, Florida Second District Court of Appeals
More Blog Entries:
Jury Awards $21.5 Million to Main Injured by Problem Door on Cruise Ship, Nov. 17, 2015, Palm Beach Injury Attorney Blog