How Contingency Fees Work in Injury Cases: Costs Explained
How contingency fees work: what percentage lawyers take, how case costs are deducted, what you owe if you lose, and what to check before signing.
How this guide was checked
This guide was written from the sources listed below, and Atif M., Arhox's editor, is responsible for it and corrects errors readers report. A dated line-by-line check against those sources is recorded here once the editor has completed one.
Drafting is assisted by AI tools. It has not been reviewed by an attorney or a licensed insurance professional. Read our editorial standards, or report a problem.
Sources (2)
- Contingency feelaw.cornell.edu · contingency fee
- ABA Model Rule 1.5americanbar.org · rule 1 5 fees
In this guide
With a contingency fee, your lawyer is paid a percentage of what you recover, and nothing in fees if you recover nothing. It is the standard arrangement for injury claims, and the details in the agreement can change what you take home by thousands of dollars.
The short version:
- The fee is commonly around one-third of the recovery, and often higher if the case goes to a lawsuit or trial.
- Case costs, such as experts and filing fees, are separate from the fee.
- Whether costs come off before or after the percentage is calculated changes your share.
- Get it in writing, and ask who pays the costs if the case loses.
This is general information, not legal advice. Fee rules are set by each state, and some states cap fees in certain kinds of case.
The basic idea
You pay nothing upfront. The lawyer takes on the work and, usually, advances the expenses. If the case ends in a settlement or a verdict, the lawyer takes the agreed percentage. If it does not, you owe no fee.
The arrangement lets people bring a claim they could not afford to fund by the hour. It also means the lawyer has a stake in the result and will decline cases they do not think can succeed.
What percentage to expect
The percentage is commonly around one-third. Many agreements use a sliding scale that rises as the case goes further:
- one rate if the claim settles before a lawsuit is filed;
- a higher rate once a lawsuit is filed;
- a higher rate again if the case goes to trial or appeal.
The reasoning is that each stage means more work and more risk for the lawyer. Percentages are negotiable, particularly where the injuries are serious and liability is clear. Some states limit the percentage in particular kinds of case, such as medical malpractice or claims against government bodies.
Fees are not the same as costs
This is the part people miss. The fee pays for the lawyer’s work. Costs are the out-of-pocket expenses of running the case:
- court filing fees;
- medical records and police reports;
- expert witnesses, such as doctors or accident reconstruction specialists;
- depositions and court reporters;
- investigators.
In a complex case, such as a truck crash with several defendants, costs can be substantial.
Before or after: a worked example
Suppose a case settles for $90,000, the fee is one-third, and costs are $6,000.
| Costs deducted first | Fee calculated first | |
|---|---|---|
| Settlement | $90,000 | $90,000 |
| Costs | $6,000 | $6,000 |
| Fee (one-third) | $28,000 (of $84,000) | $30,000 (of $90,000) |
| You receive | $56,000 | $54,000 |
The same settlement and the same percentage leave a $2,000 difference. These figures are an illustration, not typical amounts. Medical liens and money owed back to health insurers may also be paid out of the settlement before you receive anything.
If the case loses
You owe no fee. Costs are a separate question, and agreements differ. Some firms absorb the costs if there is no recovery. Others make the client responsible for them. Ask this directly and make sure the answer is written into the agreement.
What to check before you sign
- The percentage at each stage: before a lawsuit, after filing, at trial, on appeal.
- Whether the percentage applies before or after costs are deducted.
- Who pays the costs if there is no recovery.
- Whether you must approve large expenses, such as hiring an expert.
- What you owe if you change lawyers or drop the case.
- How medical liens and insurer reimbursements will be handled.
- That you will get a written statement at the end showing the recovery, the fee, the costs, and your share.
A contingency fee agreement should be in writing and signed by you. The American Bar Association’s model rule on fees, which state ethics rules largely follow, requires exactly that, and requires the agreement to say how the fee is worked out at settlement, trial, or appeal, and whether expenses come off before or after the fee is calculated (ABA Model Rule 1.5). Your state’s version may differ in the details. A lawyer who is vague about any of these points is giving you useful information about how the relationship will go.
Frequently asked questions
Do I pay anything upfront with a contingency fee?
Normally no. The lawyer is paid from the recovery. Check whether you could be asked to pay costs as the case goes on; most injury firms advance them.
Can I negotiate the percentage?
Yes. Percentages are not fixed by law in most cases, and lawyers will sometimes agree a lower rate for a strong, high-value claim.
What happens if I fire my lawyer?
You can change lawyers. The first lawyer may be entitled to payment for the work already done, usually taken from any eventual recovery. The agreement should say how this works.
Is a contingency fee allowed in every kind of case?
No. It is standard in injury cases but generally not permitted in criminal cases or most family law matters.
Is the fee taken from the whole settlement, including medical bills?
Usually the percentage applies to the total recovery, or to the total after costs. Money owed to medical providers and insurers typically comes out of your share. Ask for a sample breakdown.
Where to go from here
Fees are one of the things to compare between firms. Our guide to choosing a truck accident lawyer lists the other questions to ask, how a car accident lawsuit works explains what happens once a case is filed, and the rest of the injury claim guides are in one place. Arhox is an independent publication, not a law firm; our editorial policy and disclaimer explain how these guides are prepared.
This is general information, not legal advice. Rules vary by state and by situation; a licensed attorney or insurance professional can speak to yours. Read the full disclaimer.