Generally, attorneys that work on personal injury cases do so on a contingency fee basis. The specific fee will generally be set forth in the attorney's fee contract.
In addition to the attorney's fees, the attorney will also generally be reimbursed for all costs expended on the litigation from the client's recovery.
In most cases, the costs come out of the client's portion of the recovery. For instance, if a total recovery of $100 is made by the attorney, his fee will generally entitle him to 33 1/3% or $33.33. The client must repay the costs of the litigation out of the remaining 66 2/3% or $66.66. If the costs total $5.00, the client will recover a total of $61.66 ($100-33.33-5=61.66).
The reason the costs must come out of the client's recovery is to prevent a conflict of interest from arising. If the attorney is responsible for paying costs out of his portion, a conflict will arise when he attempts to save money on the case by hiring no experts at all or hiring cheap, bad ones. Additionally, since all an attorney can offer is his time as a service, if the costs of the case are high and the costs come out of his fee, he will recover nothing. In this situation, he has merely acted like a bank to finance the recovery for the client for free.
There are numerous items that make up the potential costs in an automobile accident case including:
This list is only illustrative and is not a complete list of the costs and expenses needed in a particular case. Each case is different and what an attorney must or may charge in one case may differ from case to case.
However, since most personal injury and automobile attorneys work strictly on a contingency fee basis, if no recovery is made on your behalf, then you do not have to reimburse these expenses. The attorney generally bears the risk of losing these costs if the case provides no recovery.
Most personal injury attorneys will provide you with an itemized list of costs and expenses incurred during your representation. In general, a reputable attorney will be careful not to overspend on your particular case. That way, all the money recovered will not go to pay attorney's fees and costs and expenses.
Sometimes, a case is not provable or for some reason not successful. In those situations, there may be instances where the costs of litigation will exceed the potential recovery. Keep in mind that the client is responsible for court costs and the expenses of litigation. For that reason, it is very difficult for personal injury attorneys to take on small cases with a limited potential for recovery.
Experienced attorneys will recognize this early on in the screening process and avoid taking cases where the costs exceed the potential recovery. It is very difficult for even an experienced attorney to tell you upfront how much money will be needed to litigate a particular case. Issues arise throughout the litigation that must be addressed. Therefore, it is virtually impossible to identify what costs are necessary at the onset of litigation.
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