If you have been involved in an accident and are seeking compensation for your injuries, you may think that pursuing your case involves expensive legal fees. Paying for a lawyer when you are injured can also make a stressful situation even more traumatic, therefore, it is important that you know your options before you take action.
Why do you need a lawyer?
A lawyer is meant to be your advocate. This means they will put their best foot forward in making a claim against the insurance companies to seek compensation for your injuries. In order to do this, lawyers obtain medical records, employment records, and accident reports to formulate what lawyers call the theory of the case. Once this theory has been fine tuned and all of the details have been put into place, a lawyer will present the theory to the insurance company highlighting what happened, what the consequences are and how much it will take to compensate you for your loss.
What is a contingency fee?
Personal injury and accident lawyers often work on something called contingency. Contingency means that in general, the lawyer’s fees are “contingent” on getting you compensation first. In other words, your lawyer will not be paid until you are.
When you first go to see a lawyer after an accident, the lawyer will listen to your potential claim and if you both agree to move forward, you will often be asked to sign a Contingency Fee Agreement (“CFA”). A CFA will outline the terms of the lawyer’s fees, when they will be paid and what extra costs may come up during the process.
What usually happens is that the lawyer will recover a percentage of whatever amount they obtain for you either through settlement negotiations or by an award at trial. It is important to discuss these percentages with your lawyer so you have a clear understanding of your agreement. Whether there is a flat rate or a sliding scale, in a contingency fee agreement if your lawyer is unable to obtain any funds for your claim, their fees will not be owed.
What are disbursements?
Typically a contingency fee agreement means that if your claim does not settle or no award has been allowed at a trial, you do not owe the lawyer fees. However, when acting on your behalf, lawyers are often required to spend money on third party services. These are often referred to as disbursements. Some examples of such disbursements include fees to physicians for medical reports, fees charged by the Courts, long distance telephone calls, photocopies and fax transmissions. Disbursements are generally payable regardless of the outcome of your case. You should discuss with your accident lawyer how disbursements are paid.
The Bottom Line
- Contingency means that a lawyer will not get paid for the time put into your claim unless they first obtain money through a settlement or court award.
- After receiving an award or settlement, a percentage of money obtained through the claim will go to paying your legal fees. This percentage may vary or change depending on the stages of your claim. Check with your lawyer and discuss these variances.
- Regardless of if your claim is successful; disbursements will have been incurred through the process of handling your claim. They can include things like the costs for medical reports, postage fees, and court filing fees. Discuss with your lawyer from the outset how these costs are managed.
David S.R. Parker is a Partner that practices in the area of Personal Injury and Accident Law. If you have questions connect with David by phone (902) 460-3447 or email dparker@boyneclarke.ca.