Our Fees In Medical Malpractice And Personal Injury Cases

“We Get Nothing Unless You Get Paid”

One of the biggest concerns we encounter when we are discussing a case with a potential client is how are we paid for our services. Many people believe in order to bring a legal claim against someone they must pay a retainer fee before the attorney will begin work on their case. This simply is not how we do things at Gilman & Bedigian. We follow a long standing tradition in American law where we only get paid if you are awarded recovery either by settlement or a favorable jury verdict. If you or a loved one has been injured, we want your focus to be on getting well and getting back to your life that is why we take all personal injury cases on a contingency fee basis.

Contingency Fee Agreements In General

A contingency fee agreement is a “fee charged for a lawyer’s services only if the lawsuit is successful or is favorably settled out of court.” Black’s Law Dictionary 362 (9th ed. 2009). These type of fee agreements are very common in personal injury cases. Contingency fee agreements allow you to hire an experienced and knowledgeable attorney without paying expensive hourly rates in order to seek recovery. In return for taking your case without up front payment, upon winning in court or reaching a favorable settlement, an attorney is entitled to a certain percentage of your recovery for the services they provided.

The contingency fee agreement is a common fee arrangement for legal services now, but it was not always this way. Peter Karsten discussed the slow acceptance of the contingency fee agreement in his article Enabling the Poor to Have Their Day in Court: The Sanctioning of Contingency Fee Contracts, a History to 1940, 47 DePaul L. Rev. 231 (1998).

America inherited much of its legal system from England. In the seventeenth century, English contracts to assist with a legal claim of another were generally seen as against the common law doctrine of champerty. Id. at 232. Champerty meant that a nonparty to a suit would “carry on litigation at his own cost and risk, in consideration of receiving, if successful, a part of the proceeds or subject sought to be recovered.” Id. at 232 n.3. As a contingency fee contract is exactly this, they were banned. Id. This was done to prevent the rich from supporting litigation for their own gain. Id. Thus, in order to bring a claim, one had to pay attorney fees up front. Id. at 233. This effectively prevented many of those with limited financial means from bringing suit.

Early in America, the Doctrine of Champerty was generally upheld by American courts. But slowly, as the American legal system developed and took on a character of its own, contingent fee agreements became more acceptable. Over the years in the mid-nineteenth century state by state sanctioned contingency arrangements. Some states passed legislation, like New York in 1848, which banned regulation on attorney fees. Id. at 240. Other states such as Virginia and Illinois ushered in legal contingency fee contracts by judicial decree. Id. at 239. The courts reasoned that “an attorney who was to receive payment only if he was successful would work harder to achieve that goal.” Id. at 241. Additionally, “he would not waste the time and resources of the state’s judicial system, his client, or his opponent with a case that was without merit.” Id. More importantly, courts wanted to open the doors of the courthouse to give everyone, regardless of income level, the ability to be represented by an attorney and seek justice for civil wrongs done to them. Id. at 243.

Contingency Fee Rules By State

Maryland, Pennsylvania, and the District of Columbia all permit contingency fee agreements. All three jurisdictions have adopted the American Bar Association’s Model Rules of Professional Conduct. With a few slight variations, the three states require contingency fee agreements to include the following components:

A contingency fee agreement must:

• Be in writing
• State what method that will be used to determine the contingency fee
• Include what percentage the attorney will charge at different points during the litigation process (Settlement/Trial/Appeal)
• What cost and expenses are to be deducted from recovery
• If the costs are to be deducted before or after the contingency fee is calculated
• At the conclusion of the case, the lawyer should provide client with a statement detailing the outcome of the matter, what recovery the client is to receive (if any), and how that sum was calculated.

Maryland also requires the writing be signed by the client. Additionally, Maryland and the District of Columbia both require that the agreement include a provision that notifies the client of any expenses the client may be responsible for regardless of the outcome of the their case.

Maryland Rules of Professional Conduct

Rule 1.5(c): A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be responsible whether or not the client is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter, and, if there is a recovery, showing the remittance to the client and the method of its determination.

Pennsylvania Rules of Professional Conduct

Rule1.5(c): A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal, litigation and other expenses to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.

District of Columbia Rules of Professional Conduct

Rule 1.5(c): A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial, or appeal, litigation, other expenses to be deducted from the recovery, whether such expenses are to be deducted before or after the contingent fee is calculated, and whether the client will be liable for expenses regardless of the outcome of the matter. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter, and if there is a recovery, showing the remittance to the client and the method of its determination.

It is common for lawyers to charge between 33⅓ percent and 45 percent of the recovery. As required by the ethics rules listed above, your contingency fee agreement should state what fee your attorney will take at each stage of the case.

Costs

Often costs are not included in the percentage recovered by the attorney. Costs can include things like: depositions, filing fees, postage, obtaining medical records, and hiring expert witnesses. These litigation costs are usually advanced by the attorney, then deducted from any recovery obtained. Sometimes, however, costs are charged as the case moves along, it depends on the agreement. Sometimes costs are deducted separately from the contingency fee; other times the costs are included as a part of the attorney’s contingency fee. Again, the contingency fee agreement should state how costs are to be handled.