Most asbestos lawsuits (like the majority of injury-related cases) are handled by attorneys on a "contingency fee" basis. That means payment of a representation fee to the attorney is dependent upon the attorney getting a favorable outcome for the client. Your attorney takes a percentage of any settlement or court judgment you receive, and usually pays all costs as the case proceeds. If there is no settlement or judgment in your favor, you typically do not owe the attorney anything. Let's go behind the scenes of a contingency fee agreement in the context of an asbestos-mesothelioma case.
"Costs" and "fees" are two different things in a legal case. Costs are the expenses that the asbestos attorney or firm pays in order to move the case along toward settlement or judgment. Costs typically include:
Most plaintiff's attorneys are cost-conscious and try not to spend any money unnecessarily. If the attorney is unable to settle, the attorney will usually be responsible for the costs, but make sure that's spelled out in your fee agreement with your lawyer.
Attorney's fees are paid to compensate the attorney for his or her time, as well as the time of the firm's support staff. That includes researching and drafting the complaint and motions, appearing in court, calling witnesses, reviewing documents, taking and defending depositions, and preparing for and putting on a trial. In certain types of cases, attorneys are paid by the hour for all of this time.
But in almost all asbestos cases, rather than billing by the hour, the law firm collects a percentage of any settlement or judgment under a contingency fee agreement.
An attorney will generally first take the contingency fee from the settlement or judgment, and then deduct costs from the remainder. For example, if your attorney has a 40% contingency fee and you settle with a defendant for $10,000, your attorney will take $4,000, pay any costs out of the remaining $6,000, and pay you the balance.
What this means practically is that early on in your case, when the start-up costs are accruing rapidly, your settlement may not be enough to cover the attorney's costs. Early settlements tend to be smaller. Costs also increase at the later stage of a case when both sides are preparing for trial, but settlements are likely to be larger by that time.
In some situations your attorney might choose to disburse some of the money to you anyway and wait to satisfy the costs from later settlements. Unless such an agreement is explicit in your contract, paying you in advance of satisfying costs is done at the discretion of your attorney.
A contingency fee is often set at 33 to 40 percent for the early stages of the case. Some attorneys will raise the percentage for settlements reached after the case is assigned a trial date, because at that point the case begins to demand more attorney time. If an appeal is necessary, the attorney's fee might go up as part of the contract, or your attorney may want to draw up a new contract. Your attorney might also reduce fees for settlements with bankrupt asbestos defendants.
If you sign a contract with one firm and the firm refers all or part of your case to another attorney—perhaps because of jurisdiction issues—you will need to sign a contract with the second attorney as well. The terms should be the same, but there might be clauses in the contract identifying how the firms will split fees. This should not result in additional cost to you. Referrals are not unusual—especially if your work-related asbestos exposure occurred in multiple states, or while you were in the military—and rest assured that a referral is not a reflection on the value of your asbestos case.
The situation is different if for some reason you and your attorney cannot work together. If you and your attorney part company and you take your case to a different firm, the attorney you initially signed a contract with has a right to recover any costs advanced, and any fees for representation, from any settlement your new firm makes. This is known as a lien. The attorneys will sort this out between themselves. But note that the second firm has no obligation to give you an identical contract.
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