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Contingency Fee

A fee arrangement in which the lawyer is paid a percentage of what is recovered, and is paid no fee if nothing is recovered.

Informational only - this is not legal advice. These definitions explain general legal vocabulary in plain English. They are not advice about your situation, reading them creates no attorney-client relationship, and the law differs from state to state and changes over time. For advice you can rely on, speak to a lawyer licensed in your state.

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What it means

Under a contingency fee the client pays no hourly rate. The lawyer takes an agreed percentage of whatever is recovered, and takes no fee at all if the case recovers nothing. It is how most personal injury work is billed, and it exists so that a claim does not depend on the claimant's ability to fund it.

The distinction that causes the most surprise is between fees and costs. The percentage is the lawyer's fee. Case costs - filing fees, records, expert witnesses, depositions - are usually a separate category, are often advanced by the firm, and are usually reimbursed out of the recovery. Whether the percentage is calculated before or after those costs come out changes the client's net share, and both methods are used.

Contingency fees are not permitted in every kind of case. In particular, they are generally prohibited in criminal defense and in securing a divorce.

Two protections in the model rule are easy to miss. The written agreement must tell the client which expenses they will owe even if the case is lost. When the matter ends, the lawyer must give the client a written statement of the outcome showing what was paid to the client and how that amount was worked out (ABA Model Rule 1.5(c)). Some kinds of claims also have fee caps set by statute. In a claim against the United States under the Federal Tort Claims Act, for example, the attorney's fee may not exceed 20 percent of an administrative settlement or 25 percent of a judgment or a settlement reached after suit is filed (28 U.S.C. § 2678).

Where this comes from

Under ABA Model Rule 1.5(c) a contingent fee agreement must be in writing, signed by the client, and must state how the fee is calculated and how expenses are handled. The Model Rules are a template: each state adopts and amends its own version, so the binding rule is the one in the state where the lawyer practices.

When people hire a lawyer for this

Read the percentage, whether it changes if the case is filed or tried, and whether it is taken before or after costs - those three terms determine what actually reaches the client. A lawyer is required to put the agreement in writing, so any of this being vague is itself worth questioning.

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Related terms

Other entries in the same area of law, each written from the same primary sources.

Assumption of Risk and Liability WaiversThe defense that a person who knowingly took on a danger cannot complain of it - and the signed waiver that tries to make that agreement explicit before the gym, the ski slope or the trampoline park.
Comparative and Contributory NegligenceRules that decide what happens to a claim when the injured person was also partly careless - and they differ sharply from state to state.
Damages in a Personal Injury ClaimThe categories of loss an injured person can be compensated for - the bills and lost earnings, the pain and the lost enjoyment of life - plus the separate and rarer category meant to punish, and the state caps that limit some of them.
Dog Bite LiabilityWho pays when a dog injures someone - the strict-liability statutes most states have and what they cover, the older "one-bite" rule that survives in the rest, negligence and leash-law claims that exist under either, the defenses of trespass and provocation, landlord and keeper liability, how homeowners' insurance responds, and the dangerous-dog proceedings that run alongside the civil claim.
Dram Shop and Social Host LiabilityWhen a bar, restaurant, liquor store or private host can be held responsible for injuries caused by someone they served alcohol to - the statutes that create the claim in most states and the very different standards they set (visibly intoxicated, under the legal drinking age, or both), the states with no claim at all, social-host rules for minors, what must be proved, the notice requirements, and who can sue.
Emotional Distress Claims (IIED and NIED)When the law compensates psychological harm on its own, without a physical injury - the intentional-infliction tort and its "outrageous conduct" threshold, the negligent-infliction claim and the limits states put on it (the impact, zone-of-danger and bystander rules), the proof a claim needs, and how these differ from the emotional-distress damages that ride on any ordinary injury claim.
Independent Medical ExaminationAn examination by a doctor chosen and paid for by the other side - routine in injury, disability and workers' compensation claims, and not treatment.
Insurance Bad FaithAn insurer's duty to deal fairly with its own policyholder - and the separate claim that arises when it does not.
Joint and Several LiabilityWhat happens when more than one person is responsible for the same injury - the traditional rule that each is liable for the whole judgment, the modern rules in most states that limit it by share of fault or by type of damages, contribution between defendants, the effect of settling with one of them, and why the rule decides who actually pays when one defendant is uninsured or bankrupt.
Loss of ConsortiumThe claim of a spouse - and in some states a child or parent - for what an injury to a family member took from the relationship itself: companionship, affection, household services and the marital relationship, what has to be proved, why it is derivative of the injured person's claim, and how it is pleaded, valued and settled.
NegligenceCarelessness that the law treats as a legal wrong because it fell below the level of care a reasonable person owed to someone else.
Negligence Per SeThe rule that breaking a safety statute - running a red light, serving alcohol to a minor, violating a building code - can itself establish that the defendant was careless, without the jury deciding what a reasonable person would have done.
Premises LiabilityThe responsibility of whoever owns or controls property for injuries caused by its condition - the slip on the wet floor, the broken stair, the unlit car park - and the rules that make the visitor's reason for being there matter.
Product LiabilityA claim against the maker or seller of a product that injured someone because of how it was designed, how it was made, or what it failed to warn about - and the federal rules that can shut some of those claims down.
Res Ipsa LoquiturThe doctrine that lets an injured person prove negligence from the accident itself when the cause is unknown but the event is one that does not ordinarily happen without carelessness - its elements, the exclusive-control requirement and how it has loosened, what the doctrine does procedurally (an inference, or a presumption shifting the burden), and where it is and is not used.
Strict LiabilityLiability for harm without any showing of carelessness - the rule for abnormally dangerous activities, for defective products in most states, and, under many state statutes, for the owner of a dog that bites.
Subrogation and Medical Liens on a SettlementWhy an injured person does not keep the whole settlement - the right of health insurers, Medicare, Medicaid, ERISA plans, workers' compensation carriers and hospitals to be repaid from a recovery for the treatment they paid for, how each kind of lien is created and enforced, the rules that reduce them, and why the liens have to be resolved before the check is cashed.
Suing the Government for an Injury (Tort Claims Acts)Why an injury caused by a government employee or a public property defect follows different rules - sovereign immunity and the statutes that waive it, the written claim that must be presented to the agency before any lawsuit and the short deadline for it, the exceptions that keep immunity (discretionary functions, most intentional torts, certain activities), damage caps, and the no-jury and no-punitive-damages rules.
Vicarious Liability (Respondeat Superior)The rule that makes an employer liable for harm its employee causes while doing the job - the reason the trucking company, the hospital or the delivery firm is the defendant, and the reason "independent contractor" is fought over so hard.
Workers' CompensationThe state no-fault system that pays medical care and part of lost wages for an injury at work without any proof of fault - and, in exchange, takes away the right to sue the employer, though not the right to sue anyone else who caused it.
Wrongful Death ClaimA claim brought by surviving family members or an estate when someone dies because of another party's wrongful act.

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Part of the LawyerLand plain-English legal glossary. Definitions are written from primary sources - statutes and court rules - and each entry states the authority it rests on, or says plainly when the doctrine is state law with no national rule.

If you cannot afford a lawyer, civil legal aid programs provide free help with many of these problems: civil legal aid programs by state.

Related free reference tools: statute of limitations for a personal-injury claim, by state, quoted from each state's official text - part of LawyerLand's legal reference tools.