What are the Contingency Fees in New Jersey?
If you get injured in an accident, you may be reluctant to hire a personal injury lawyer for fear of how much it will cost you. You are already dealing with expensive medical bills, property repairs and lost wages – you do not want the added expenses of attorney fees. Luckily, most personal injury lawyers operate on a contingency fee basis. This is a type of payment arrangement that can make legal services affordable and stress-free.
What Is a Contingency Fee Arrangement?
If you hear that a law firm works on a contingency fee basis, this means the law firm does not charge a fixed hourly fee or charge upfront for services. Instead, the lawyer will only charge the client if and when the lawyer wins the case.
With a contingency fee arrangement, the lawyer will charge a flat rate, usually in the form of a percentage. This percentage can vary from 30% to 40% depending on the law firm and the difficulty of the case, although the average is about 33% (one-third) of the award recovered.
If the attorney wins the case and obtains the client a financial award in the form of a settlement or jury verdict, the lawyer will deduct his or her fee percentage from the award won. That way, the client never has to pay attorney’s fees out of pocket.
If the lawyer does not win the case, there will be no attorney’s fees assessed. A contingency fee payment arrangement guarantees that an injured accident victim can afford high-quality legal representation without any financial risk.
Specifically, in New Jersey, if the law firm recovers money for you, which is greater than your costs and expenses, you will pay the law firm a legal fee. The fee will be based on a percentage of the net recovery. Net recovery is the total recovered on your behalf, minus your costs and expenses, and minus any interest in a judgement pursuant to R. 4:41-11(b). The will be as follows:
- 33.3% on the first $750,000 recovered;
- 30% on the next $750,000 recovered;
- 25% on the next $750,000 recovered;
- 20% on the next $750,000 recovered; and
- on all amounts recovered in excess of the above by application for reasonable fee in accordance with the provisions of R.1:21-7 paragraph (f); and
- where the amount recovered is for the benefit of a client who was a minor or mentally incapacitated when the contingent fee arrangement was made, the foregoing limits shall apply, except that the fee on any amount recovered by settlement before empaneling of the jury or, in a bench trial, the earlier to occur of plaintiff’s opening statement or the commencement of testimony of the first witness, shall not exceed 25%
Benefits of a Contingency Fee Arrangement
A contingency fee arrangement can be the ideal solution for an injured accident victim who cannot afford to hire an attorney out of pocket. There are two key benefits of a contingency fee arrangement for a client: no upfront fees (and no fees at all if the case is not won) and attorney incentive.
With this type of fee arrangement, the victim will only have to pay if the lawyer wins the personal injury case. This eliminates a great deal of financial risk for the victim bringing the personal injury case. It also motivates the attorney to work hard to obtain maximum compensation since his or her paycheck is directly tied to the amount of the award. If the victim does not get paid, neither will the attorney.
Other Costs in a Personal Injury Case
Even with a contingency fee arrangement, you may have to pay for other litigation costs besides attorney fees. There are certain costs and fees that come with bringing a personal injury lawsuit in New Jersey besides attorney fees. You may have to pay the following expenses to file and pursue an injury case:
- Court filing fee. In New Jersey, the cost to file a civil claim is $50 if your claim is worth $3,000 or less or $75 if it is worth $3,000 to $15,000. You will also have to pay $5 per defendant served, $7 per defendant for a mail service fee and $100 for a jury fee.
- Discovery expenses. The discovery phase of a lawsuit can come with certain fees, such as paying for a deposition transcript.
- Hiring an expert witness. Expert witnesses can be expensive. Many charge upwards of $300 per hour for their services, and more if they have to go to court.
- Obtaining evidence. Collecting evidence can cost money, such as the price of obtaining copies of medical records and police reports.
The exact expenses on your legal bill will depend on factors such as the complexity of your case, how long it takes to resolve and the laws in your state. Your lawyer should prepare you ahead of time for any legal fees and litigation costs your family may have to pay. In some cases, a lawyer may arrange to cover these expenses upfront and recoup the costs later, either from a settlement award or with a payment arrangement.
If you wish to obtain more information about attorney fees during a personal injury case, consult with a Bergen County personal injury attorney at the Law Offices of Jeffrey S. Hasson, P.C. today.